German shipyard Flensburger Schiffbau-Gesellschaft (FSG) has confirmed it is in talks with Hamburg-based Pella Sietas about the latter acquiring the financially troubled business. The confirmation came yesterday just hours after Irish Continental Group (ICG) confirmed its contract for a new ferry from FSG had been terminated.
Insolvency
FSG is currently in self-administered insolvency following long term losses. The financial issues were brought to a head with the late delivery of Irish Ferries W.B. YEATS. Ultimately this resulted in the yard being acquired by German investor and entrepeneur Lars Windhorst through his Sapinda (now Tennor Holding) investment vehicle. It appears, however, that Mr Lindhorst is now open to a sale. Last month the entrepreneur loaned €5m to the yard to help keep it afloat during the COVID-19 crisis.
Space-constrained
Pella Sietas is situated in a space-constrained location where the River Este and River Elbe meet. St Petersburg-based Pella acquired the business from administrators in 2014. It has been suggested in the German media that a takeover of FSG may be aimed at expanding the capabilities of the Pella Sietas business. The location of the Hamburg yard means that there are constraints on the size of vessels which can be built due to a flood barrier and limited depth in the channel to the River itself. However, a takeover is far from certain with negotiations still ongoing. Job cuts at FSG, which directly employs about 650 people, have also not yet been ruled out.
Single order
With the confirmation that the Irish Continental Group contract has been terminated, FSG now only has a single order on its books. This is for Brittany Ferries HONFLEUR which is currently in the fitting out stage. Production at the yard is currently paused due to the COVID-19 pandemic. However, the company is hopeful of resuming production later this month. An order for two large fast-Ro-Pax ferries from the Tasmanian Government was also cancelled earlier in the year.
As of last month, FSG was still in the process of securing sufficient finance to complete HONFLEUR. The wages and salaries of FSG’s 650 employees are secure until at least July due to the insolvency process.
