A update on the situation may be helpful in what continues to be both delicate and complex financial negotiations in respect of the future of this great company.
As widely reported, it’s financial difficulties had caused the company to temporarily suspend share trading on the stock market. This also resulted in the chairman of the group, John Wood, standing down. He has now been replaced by a new executive chairman who is Russell Downs. Mr Downs is an acknowledged restructuring expert and a well-known figure in the City of London.
The latest events in respect of the companies’s activities continue to be a mixture of good and bad news.
It was of huge disappointment that they have had to scrap plans for a new ferry service between Cornwall and the Isles of Scilly without a single sailing. The new ferry had been awaiting the commencement of service and had been tied up in Penzance fully prepared and ready to sail. Such however have been the pressures on the companies’s finances that a decision was made to pull the plug with no likelihood that it will be resumed.
There has also been disappointing news with an announcement that the Falkland Islands Government has withdrawn from a project where the company had been planning to build a new £120 million floating port for the Islands. This had reached an advanced stage of negotiation but currently talks are suspended.
Obviously these are worrying events, however, there is better news with progress being made to re-structure the companies finances. It has recently obtained a new loan facility of £19.5 million from its current backer who is Riverstone, an American Asset Manager. They already have a larger loan facility in place. A spokesperson within the company said that this should provide them with sufficient bridging finance to continue to fulfil their current commitments. It is significant that this has been achieved despite failing to secure support from Government for a loan guarantee.
It also remains the case that the company has been selected by the Ministry of Defence to deliver 3 fleet support ship for the Royal Fleet Auxiliary. This contract is valued at £1.6bn and has been awarded to a British-led consortium comprising BMT, Harland & Wolff and Navantia UK. In light of its acknowledged expertise, Appledore Yard will participate in the fabrication of many elements of this work. This contract has been awarded to ensure that the ships are built in the UK. If these were not to be delivered, then it would be the first contract in the history of the Royal Navy to have to be built overseas.
There is further excellent news with progress at Appledore on their latest scheme which has reached an important milestone. On the 8th of June a specialist cable barge, named HMS Aths which will enter service in the Naval Base at Portsmouth, was lifted from its construction area into the dock. and has now been moved to the New Quay Yard following successful flooding of the dock. This impressive vessel has been designed to deploy and retrieve cabling for Naval vessels. The barge will manage anchors and anchor chains ensuring seamless operations at Portsmouth. Painting is now underway. Ballasting is scheduled to start with final touches expected to be completed shortly. This is a major success for the Appledore yard and is a demonstration of the fabrication capabilities that can be delivered locally. It also enables preparations to be advanced to start work on the much larger MOD contract for the fleet solid support bow section. This project is moving rapidly and the first steel components for it are due to be cut at the beginning of 2025.
In other yards operated by the group good progress is also being made with their current order book. Most recently in June they completed another part of an order for 33 new barges at one of their two Scottish yard which is at Anish. Eight of these vessels have already been built at Belfast and a further six at the second Scottish yard which is at Methil. These barges transport recyclable and non-recyclable waste and remove, approximately, 100,000 truck journeys from London’s Road Network each year. This is part of the companies commitment to supporting UK industries and contributing to environmental sustainability. Across the company there is also considerable expertise in the energy and renewable sectors which positions them well for the Celtic Sea Floating Offshore Wind projects.
These are certainly concerning times but two consistent messages are clear – firstly our new Government is committed to maintaining ship building capabilities in the UK and secondly the Appledore Yard is a crown jewel for delivery with the highest levels of skills, quality and efficiency.
These will be important considerations over the next few months. Much support is being given both locally and nationally to assist in achieving a successful future for one of the South West’s most important and historic businesses.
