Federal bigwigs and local administration are gunning for a dominant chunk in Meyer Werft.
The higher-ups in the Federal Government and Lower Saxony are planning to invest around 80% of stricken shipyard, Meyer Werft, for a cool 400 million euros, as revealed by Lower Saxony's Minister of Economics, Olaf Lies, during a Hannover state parliament session. On top of that, they're also pledging guarantees worth approximately one billion euros each, to prevent the company from crashing. Last week, there were whispers about the government temporarily intervening in the shipyard's affairs. Now, Lies has revealed the nitty-gritty.
20,000 gigs in Germany are hanging in the balance.
Lies justified the proposed rescue measures, explaining how the shipyard's predicament poses a direct and indirect threat to more than 20,000 jobs in Germany, with roughly half of them nestled in Lower Saxony. "We can't afford to sit on the sidelines," Lies, an SPD politician, pointed out. Furthermore, the German maritime sector needs to be safeguarded.
Lies clarified that the state doesn't aim to own the shipyard permanently. "We envision a bright future for the shipyard under private ownership," he asserted. The scenario also offers a chance for the Meyer family to lay claim to the shares once again.
The Meyer Werft, famous for its luxury cruise liners, needs to rake in nearly 2.8 billion euros by the year's end for funding new ship construction projects. These deals need to be sealed by September 15th.
It emerged that the company's predicament isn't due to a lack of orders. However, some ship contracts were signed before the Corona pandemic hit, and they failed to account for the soaring energy and raw material costs. Additionally, commercial vessels usually secure 80% of their construction cost upon delivery, forcing the shipyard to rely on loans for interim financing during construction.
The rescue measures announced by Lower Saxony's Minister of Economics Olaf Lies seek to protect more than 20,000 jobs in Germany, with half of them based in Lower Saxony. Lies emphasized that the state doesn't intend to control Meyer Werft indefinitely, envisioning a prosperous future for the shipyard under private ownership.
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The current state and future plans for acquiring a majority stake in Meyer Werft by federal authorities and the local administration require substantial financial aid to stabilize the company. Here's the lowdown:
- Financial Aid: The German government and the state of Lower Saxony are pitching in 400 million euros ($445.84 million) for an 80% stake in Meyer Werft, and pledging guarantees for 2.6 billion euros in loans for the family-owned company[1][4].
- Financial Gap: Meyer Werft is grappling with a substantial financial deficit due to the delayed impacts of the COVID-19 pandemic, to the tune of nearly 2.8 billion euros. This shortfall is partly due to unforeseen cost increases in the construction of some projects[1][4].
- Supervisory Board: To manage the company's finances and operations, a 13-member supervisory board has been constituted. This board includes shareholder representatives, employee representatives, and external experts. The board will monitor the company's business policy and development, ensuring transparency and accountability[4].
- Zero4cruise Project: Meyer Werft is also participating in the zero4cruise project, which aims to develop climate-friendly and low-emission energy systems for cruise ships using fuel cell technology powered by green methanol. This project is part of the company's efforts to transition to more sustainable practices[1][3].
- Employment Impact: The acquisition and stabilization of Meyer Werft are projected to guarantee the shipyard's continued existence and employment opportunities in Germany. Chancellor Olaf Scholz has promised workers that the government is working to secure the shipyard's future, which boasts a 229-year legacy and employs a considerable number of individuals in Germany[1][4].
In essence, the acquisition of a majority stake by federal authorities and the local administration aims to stabilize Meyer Werft financially, ensuring the company's continuation and employment prospects in Germany. The formation of a supervisory board and the implementation of sustainable projects like zero4cruise underscore the commitment to preserving and enhancing the company's operations.
