Cammell future still in a fog as buyout deal drags

The waiting game game continued this week over the future of the insolvent UK shipbuilder Cammell Laird.

The waiting game game continued this week over the future of the insolvent UK shipbuilder Cammell Laird as legal wrangles between the receiver and the sole bidder for the group held up the sale of its Teesside yard.

Former Teesside shipyard boss Eric Welsh placed the first and only bid for the group’s assets with receiver Pricewaterhouse-Coopers which was appointed more than 10 weeks ago to take over and sell off the ship repairer.

Welsh leads a team of former managers who ran the yard before it was bought by Cammell Laird. ‘This is the same team that managed the facility very successfully up to 1997 and we are ready to sign a contract,’ he said.

PwC last week gave the go-ahead to the bid for the River Tees facility, but Welsh insisted the deal had not yet been sealed for his takeover of the three dry docks site as a ship repair yard.

He declined to discuss the details that had thrown lawyers into deadlock. But he confirmed that two substantive issues were blocking the deal’s progress.

Offer accepted

A PwC spokeswoman said Welsh made an offer that had been accepted. She said contracts were being drawn up that would have to be agreed before the sale went ahead.

Industry insiders believe PwC is arguing that Welsh’s offer must include the takeover of pollution liabilities at the Teesside facility.

This would embroil the new onwer in the legacy of a threatened court action by the Tees & Hartlepool Port Authority against Cammell Laird over tin residues at the waterfront.

PwC is also believed to be insisting that the new management must take over responsibility for the employment rights of 16 longstanding workers out of a rump of 29 retained at the yard.

The Teesside facility had employed around 150 workers. It was saved from total closure when in April when the receiver decided to keep a skeleton staff.

PwC receiver Ian Stokoe last month rejected an initial offer by Welsh as too low. Cammell went into receivership in mid-April after Italian cruiseship owner Costa Crociere pulled the plug on a £50m deal to lengthen its Costa Classica liner. The shipyard clinched the contract by agreeing to risky pay-on-delivery terms.

Accountant KPMG is chasing the Italian shipowner for up £42m.

German yard Lloyd Werft dealt a further blow to Cammell’s receiver last week when it ended talks to buy the midship section built for the Costa Classica, which is sitting in Birkenhead, and complete the work at its Bremerhaven yard. Managing director Werner Lüken said that legal problems were ‘so large that we would not have been able to fulfil Costa’s stipulations.’

The Italian company had set a deadline for completion of the work between November 2001 and March next year. This would have required the 44.6m long unit to be delivered to northern Germany by the end of this month.

Meanwhile, there has been confusion around an expected bid from Jaap Kroese, owner of shipbuilder Swan Hunter, for the assets of Cammell’s Hebburn yard, which lies opposite his Wallsend yard on the Tyne.

Kroese said: ‘They have had my offer for quite a few weeks, but kept putting it off.’The multi-millionaire Dutchman wants to refit the 42-acre site into a centre for North Sea offshore shipbuilding work. He would also use the facility to help his Wallsend site complete large MoD shipbuilding contracts.

But a PwC spokeswoman said: ‘We don’t know what is happening. He was supposed to be poised to fax over his offer last week and it never arrived.’

A rival bid for Tyneside is also in the offing from former Cammell Laird North-East managing director David Skentelbery, who has been negotiating with the DTI for £800,000 in aid for his proposed management buyout bid.

Jerry Frank is the business correspondent on Lloyd’s List, the London-based international maritime daily newspaper