The feds and the local administration are eyeing a massive takeover of Meyer Werft, with a goal of owning an astounding 80% of the company for a whopping 400 million euros. This revelation was made by Lower Saxony's Economics Minister, Olaf Lies, during a meeting in Hannover's state parliament. The plan also includes providing guarantees to prevent the shipyard from collapsing, with each promise valued at around one billion euros. Last week, there were hints about a temporary government intervention in the shipyard's affairs, and now Lies has spilled the beans on the specifics.
Over 20,000 jobs in Germany are hanging by a thread.
Lies defended the intervention, stressing that Meyer Werft's predicament poses an immediate and indirect threat to over 20,000 jobs across Germany, with around half of them located in Lower Saxony. "We can't be passive spectators," he said, echoing the sentiments of the SPD politician. Plus, the German maritime sector requires protection.
Lies clarified that the state isn't interested in becoming Meyer Werft's primary shareholder indefinitely. Instead, he envisions a prosperous future for the shipyard under private ownership. This scenario also leaves room for the Meyer family to regain control of the shares.
Meyer Werft, renowned for its luxury cruise liners, needs to raise approximately 2.8 billion euros by the end of 2027 to fund new ship construction projects. These agreements must be finalized by September 15th.
The company's predicament isn't due to a lack of orders. However, some contracts were signed before the Corona pandemic, and they fail to accommodate price adjustments aligned with the spiked energy and raw material costs. Commercial vessels usually receive 80% of their construction price upon delivery, forcing the shipyard to rely on loans for interim financing.
The rescue measures, revealed by Lower Saxony's Economics Minister Olaf Lies, are intended to protect over 20,000 jobs in Germany, with half of them based in Lower Saxony. Lies emphasized that the state isn't aiming to be Meyer Werft's permanent majority shareholder, instead envisioning a thriving future for the shipyard under private ownership.
Further Reading:
Enrichment Insights: - The financial crisis at Meyer Werft, a prominent cruise ship builder, primarily stems from a substantial financing gap resulting from the delayed impact of a demand slump during the COVID-19 pandemic, despite maintaining a full order book[2]. - The German federal and state governments have approved a rescue plan for Meyer Werft, which includes acquiring an 80% stake in the company for 400 million euros, loan guarantees worth 2.6 billion euros, and support from German Chancellor Olaf Scholz, who visited the shipyard and demonstrated government backing[2]. - This collaborative effort seeks to preserve the shipyard's ongoing existence, safeguard jobs, and ensure the long-term viability of the 229-year-old company, which is a critical component of Germany's maritime industry[2].
