(Bloomberg) -- The German government is working on a potential lifeline for struggling shipbuilder Meyer Werft GmbH, the privately-held company that just days ago won a follow-on contract to supply vessels for Disney Cruise Line’s fleet.
“It’s clear we all want to secure the continued existence of the shipyard and everything that depends on it,” Chancellor Olaf Scholz said during a visit to the company near the northern port city of Bremen on Thursday.
“The federal government is doing its part to solve the problem,” he added. “And if everyone else follows suit, which I expect, then we’ll get it done.” Talks with banks are ongoing and the lower house of parliament in Berlin and the European Commission will also be involved, he said.
The storied Papenburg-based shipyard, owned in the seventh generation by the Meyer family, employs about 3,300 people. It ran into trouble during the Covid-19 pandemic and banks started to question its creditworthiness. A large chunk of the purchase price for cruise ships is only paid when vessels are handed over to customers, making interim financing essential.
The government plans to take temporary majority ownership of the company, which is struggling to fill a €2.7 billion ($3 billion) gap in its finances, according to German media reports.
Federal and state governments would contribute €400 million in equity, backstop bank loans and take a temporary stake of at least 80%, the reports said.
Apart from its main shipbuilding operations, Meyer Werft is also involved in a key project in Germany’s shift toward renewable energy. The company helps to build large converter platforms near the Baltic port of Rostock that are needed to feed electricity from offshore wind parks into the grid.
Economy Minister Robert Habeck declined to comment on the specifics of the planned rescue deal, telling reporters earlier Thursday that “solutions are possible and within reach.”
Meyer Werft on Aug. 12 announced a new contract to build four more ships for the Disney Cruise Line on top of the four already in its order book.
--With assistance from Iain Rogers.
(Updates with Scholz comments starting in second paragraph)
©2024 Bloomberg L.P.
