€600 million support tipped for troubled German yard group

Global Dream transfer from Rostock to Wismar last year. Shut down now could threaten completions..Global Dream transfer from Rostock to Wismar last year. Shut down now could threaten completions.

The east German shipbuilding group MV Werften (MVW) has been told it can hope for financial support worth some €600 million up to the end of the year to help it cope with a production shutdown caused by the Corona virus pandemic, writes Germany Correspondent Tom Todd.

The sum was mentioned by Harry Glawe, Economics Minister of the German Baltic coastal state of Mecklenburg-Vorpommern after a joint session of the State Parliament’s Economic and Financial Committee. The state is the home of MVW’s three east German yards in Wismar, Rostock-Warnemünde and Stralsund.

It was not initially clear what form the financial support would take. But reports suggested it had been requested by MVW and Glawe said it would have to be repaid eventually by the yard group itself. He said negotiations on the support package were still underway and involved the state, group owner Genting Hong Kong, the Federal government in Berlin and the banks. “We expect a result in the coming weeks”, he was quoted as saying.

Glawe said not only the yards but also their ship equipment and component suppliers could also reckon on support worth some €50 million to cover unpaid deliveries. This would also have to be paid back by the yards once production and financing solutions had been worked out, the minister said.

MVW production in Wismar, Stralsund and Rostock-Warnemünde was closed down in mid March for an initial four week period because of the Coronavirus pandemic and the suspension of the cruise market. Short-time working began on 1 April with more than 3,000 employees affected and has since been extended to at least 3 May.

The shut-down includes MVW’s first two showcase Global Class cruise ships – which are being built in Wismar and Rostock. The 208,000gt newbuilds are for delivery to Genting’s Dream Cruises late 2020/early 2021 and in 2022.

Of 96,000 kW installed power, each 342 x 46.4m ship will have six MAN 48/60CR diesels and three Azipod XO thrusters. Work on a new series of 88,000gt Universal Class cruise ships is also underway. The first was slated for delivery in late 2022 but the newbuild schedule may well be subject to delay.

Daniel Friedrich of the IG Metall Küste trade union, whose members include shipyard workers, stressed the importance of financial help for the MVW yards. He said they were “important industrial hubs for our region and jobs there have to be secured”. They needed finance and time to cope with the situation, he added.

Such proposals do not enjoy universal support. One parliamentary critic noted MVW had been promised €375 million in guarantees from the Berlin and state governments in 2019. Support “should not become a bottomless pit”, he declared.

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