Germany Agrees to Rescue Cruise Ship Builder Meyer Werft

By Kamil Kowalcze

Sep 6, 2024 (Bloomberg) –Germany hammered out a deal that provides a possible lifeline for struggling shipbuilder Meyer Werft GmbH, the privately-held firm that lately received a follow-on contract to produce vessels for Disney Cruise Line’s fleet.

The federal authorities will purchase a 40% stake in Meyer Werft together with “a stake of the identical quantity by the state of Decrease Saxony,” in keeping with Economic system Ministry officers. The financing for the federal authorities quantities to round €200 million ($222 million).

The federal government and Decrease Saxony will “additionally assure 80% of a debt capital credit score line totaling €2.6 billion,” they stated. “The banks assume 20% at their very own threat.”

Chancellor Olaf Scholz visited the producer final month and voiced optimism {that a} resolution may be present in talks with banks, including that Germany’s decrease home of parliament in Berlin and the European Fee would even be concerned to get the deal permitted.

The storied Papenburg-based shipyard, owned within the seventh era by the Meyer household, employs about 3,300 folks. It bumped into bother in the course of the Covid-19 pandemic and banks began to query its creditworthiness. A big chunk of the acquisition value for cruise ships is barely paid when vessels are handed over to prospects, making interim financing important.

“It’s the agency dedication of the federal government — of me personally and of my ministry, which is doing the work right here — that Meyer Werft will get the assist it requires to proceed to construct ships,” Economic system Minister Robert Habeck stated on Friday.

The rescue comes amid a protracted downturn within the German manufacturing sector, which impacts Europe’s largest financial system as an entire.

Other than its predominant shipbuilding operations, Meyer Werft can be concerned in a key mission in Germany’s shift towards renewable power. The corporate helps to construct giant converter platforms close to the Baltic port of Rostock which are wanted to feed electrical energy from offshore wind parks into the grid.

Meyer Werft on Aug. 12 introduced a brand new contract to construct 4 extra ships for the Disney Cruise Line on prime of the 4 already in its order e book.