In major news on UK stocks, Harland & Wolff Group Holdings PLC (GB:HARL) is looking to secure a financial lifeline in the form of loans as it strives to stay afloat. According to the Financial Times, the company is in talks with the U.S.-based lending fund Riverstone Credit Partners about extending its current $115 million credit facility by £20 million.
Harland & Wolff (H&W) is a UK-based manufacturing company specializing in the maritime and offshore industries The company is known for building the British luxury passenger line Titanic.
Harland & Wolff’s Share Trading Suspension
On July 1, Harland & Wolff announced the temporary suspension of trading in its shares after failing to publish its audited full-year results for 2023. The delay was attributed to the complex nature of some of its contracts, which span multiple years. The company is working with its auditors to find an optimal solution for recording revenues from these contracts.
Nonetheless, the company announced its unaudited results, reporting an operating loss of £24.7 million for 2023, down from a loss of £58.5 million in the previous year. Meanwhile, revenues increased from £27.8 million in 2022 to £86.9 million in 2023.
Year-to-date, H&W shares have lost around 38% in trading.
Mounting Troubles for Harland & Wolff
The main concern in Harland & Wolff’s results was the high interest costs, which rose from £12.3 million in 2022 to £18.37 million last year.
The company has been in talks with a group of banks to secure a £200 million loan at a lower interest rate, with the UK government acting as a guarantor. However, it faced a setback in May, when reports surfaced that the UK government was planning to reject its previously promised £200 million loan guarantee. The company has denied these reports, calling them misleading.
Without the UK government’s guarantee, H&W would have to find alternative funding to meet its working capital requirements and complete essential contracts, such as building three ships for a £1.6 billion Royal Navy project.
The company has yet to issue a formal statement on this matter.
