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Managerial change at FSG as shipyard looks to secure its future amid financial difficulties

Update 15/12/19: Siem has sold a 76% stake in Flensburger Schiffbau-Gesellschaft (FSG) to Sapinda Holding B.V., an investment group backed by German entrepreneur Lars Windhorst. The sale means there will be a €33m injection of capital from Sapinda into FSG with Siem themselves also making a “significant” contribution. Siem will retain the remainder of the shares and will retain their majority on the advisory board.

Financially troubled German shipyard Flensburger Schiffbau-Gesellschaft (FSG) has parted company with its CEO Rudiger Fuchs according to NDR.de.  Mr Fuchs was removed from his role and replaced with Alexander Gregg-Smith from parent company Siem last Thursday January 31st.  Fuchs had been in the role since the summer of 2016, replacing Gregg-Smith who had run the company for around 6 months previous.  As we previously reported, FSG is in serious financial difficulty following the late delivery of Irish Ferries’ W.B. YEATS and the extra costs this has incurred at the yard including reported compensation paid to Irish Ferries owner Irish Continental Group. While these extra costs are certainly a factor in the yards financial issues, it has been reported in the German press that FSG has not made a profit since at least 2014 (despite the yard saying otherwise in the press release announcing the handover of W.B. YEATS) and that the yard has been in talks with the Finance Ministry and the Ministry of Economic Affairs for some time.

The hull of Brittany Ferries HONFLEUR just after launch on December 14th 2018. Copyright © Brittany Ferries.
The hull of Brittany Ferries HONFLEUR just after launch on December 14th 2018. Copyright © Brittany Ferries.

Brittany Ferries meanwhile have announced that the ferry they have under construction at the yard, HONFLEUR will be delayed but that they have not yet been given a revised delivery date. It is normal practice that a vessel isn’t paid for in full by the owner until it is delivered which has meant the yard is short of working capital in order to continue on its current projects.  W.B YEATS was the first large Ro-Pax ferry the yard have ever built, and also the first to be built to Safe Return To Port standards.  This meant the build was technically challenging for the yard which until now has only built smaller passenger ferries and Ro-Ro freight vessels, which has directly resulted in delays.  Problems with suppliers have also been attributed to the delays, as has an apparent act of sabotage which caused one of the vessels main engines to overheat.  NDR has also reported that employee wages, supplier invoices, and loan payments will be paid directly by Siem, rather than FSG. 

One of a series of renders of HONFLEUR at sea released by Brittany Ferries on the day her hull was launched, 14th December 2018. Brittany Ferries.
One of a series of renders of HONFLEUR at sea released by Brittany Ferries on the day her hull was launched, 14th December 2018. Brittany Ferries.

As reported previously on NIFS it is understood that Siem and another investor are prepared to invest more money in order to keep the business afloat, however, in order to do this, the business must be able to prove it can operate “in the black” and not continue making the losses it has since 2014.  The yard is understood to be in discussions with both suppliers and customers to secure better financial terms.  NDR has reported that one of the names linked to being the mystery investor is Lars Windhorst, an entrepreneur and co-founder of investment group Sapinda.  Neither FSG or Mr Windhorst himself has confirmed his involvement.  It appears that the federal government of Germany have ruled out any involvement in investing in FSG, however, though the local government of Schleswig-Holstein are apparently discussing providing further financial guarantees to the firm if the yard can prove it can operate profitably. 

Then FSG CEO Rudiger Fuchs and Irish Ferries Managing Director Andrew Sheen at the handover of <strong>W.B. YEATS</strong>. Flensburger Schiffbau-Gesellschaft.” class=”wp-image-17205″/></a><figcaption>Then FSG CEO Rudiger Fuchs and Irish Ferries Managing Director Andrew Sheen at the handover of <strong>W.B. YEATS</strong>. Flensburger Schiffbau-Gesellschaft.</figcaption></figure> <p>FSG are currently working on <strong>HONFLEUR</strong> and an as-yet-unnamed Ro-Ro for their parent company Siem.  They are also due to deliver the Ro-Ro <strong>MARIA GRAZIA ONORATO</strong> to Siem soon for charter to Italian operator Tirrenia having already delivered sister-ship <strong>ALF POLLAK</strong> which has joined DFDS on sub-charter.  While contractors have reportedly left the site taking their tools and materials with them, some work does still appear to be continuing on the yards current projects with the yard’s direct employees still on site. It is not yet known what effect if any these financial difficulties will have on the yards order book which is currently full and currently includes a further Ro-Ro for Siem, another (even larger) Irish Ferries ferry to replace <strong><a href=ULYSSES, and two new fast Ro-Pax ferries for TT-Line of Tasmania.
A rendering of how the new TT-Line "Spirit of Tasmania" new builds will look. FSG.
A rendering of how the new TT-Line “Spirit of Tasmania” new builds will look. FSG.

Steven Tarbox

Steven is a former retail professional and a ferry writer and photographer. He created NI Ferry Site as a web design project in 2014 to be a news and information source for everyone with an interest in ferries, with a particular focus on Northern Ireland. Steven is the editor of the website and looks after all of the technical aspects.
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