The troubled Belfast shipyard that built the Titanic has been bailed out with a £55m defense contract just weeks after the tax authorities tried to shut the company down.
Harland & Wolff has won the first defense contract in its 161-year history to overhaul minesweeper ships in what it describes as a “watershed moment”.
The award comes less than a month after Harland & Wolff became engaged in a row with HM Revenue & Customs†
HMRC has filed a petition to dissolve the company for the second time this year in June over an alleged unpaid bill of £92,275.
The company maintained that its most recent legal claim was wrongly filed. However, the tax authorities say they will take action “where necessary”.
The Defense Department declined to comment last night on whether two liquidation requests from HMRC — filed against Harland & Wolff in recent months — were considered in its decision-making process.
The most recent lawsuit was brought by HMRC against Harland & Wolff subsidiary Arnish, which operates on a 38-acre development site on the northwest coast of Scotland, on the Isle of Lewis.
Three months earlier, the tax authorities had issued another Harland & Wolff subsidiary, Firth of Forth shipyard Methil, with a request for liquidation.
Both requests were subsequently withdrawn.
Harland & Wolff maintained that its accounting system had led to some of its problems with alleged debts to HMRC.
Harland & Wolff is part of a team in the race to build support ships for the Royal Navy, as the force tries to diversify its choices beyond dominant naval shipbuilders BAE Systems and Babcock. But there is a big question mark as to whether there is enough work to support more than a few military shipyards in the UK in the long run.
Defense expert Francis Tusa said: “There’s no problem with a rescue as long as you understand what you’re doing. By giving them a glass-reinforced plastic boat and expecting that by refurbishing you will build the skills to build a first-class to be an editing site is just delusional.”
Harland & Wolff was rescued from closure in 2019 after its shipbuilding business dried up and has since reinvented itself. winning a contract to overhaul Cunard’s Queen Victoria and P&O Cruises’ ship Aurora†
It also leads one of the final two bids to build a replacement for HMY Britannia, the new royal flagship nicknamed “Britain’s Air Force One” by its supporters.
The bosses want to get work in the growing wind sector and take advantage of the £4 billion investment Boris Johnson pledged to support shipyards in Britain.
Work on the new defense contract, which could last up to two years, will begin next month at the Appledore site in Devon.
Harland will refurbish a retired Royal Navy minehunter that will be sold to the Lithuanian Navy and then fitted with new equipment by BAE Systems, the UK’s largest defense company.
John Wood, CEO of Harland & Wolff said, “This is a turning point.”
The deal makes the company “a credible alternative to its existing industrial base,” he added. “This contract is confirmation that the government can go elsewhere, and recognizes the investment and progress made over the past two years to enable the company to implement such programs.”
The announcement was warmly welcomed by investors. London-listed shares rose nearly a third before settling for 14 percent higher. The company is worth about 23 million euros.
The company is significantly smaller than it once was. Founded in 1861 by Edward Harland and his German business partner, Gustav Wolff, the shipbuilder in its splendor employed 35,000 people.
It played a vital role in World War II, building 140 warships and 123 merchant ships and over 500 tanks.
It was nationalized in the 1950s after air travel killed transatlantic sea crossings. The last cruise ship Harland & Wolff The Canberra was completely rebuilt in 1960.
Peter Renton, an analyst at Cenkos, the company’s broker, said in a note: “The Russian invasion of Ukraine highlights the valuable role H&W can play in supporting the defense industry, as many NATO countries (including the UK) want to increase their defense spending. The resulting rise in oil and gas prices also demonstrates the importance of accelerating renewable energy projects.”