Cammell Laird, the UK’s largest ship repair and conversion company, is looking to raise £76m with a bond issue to create working capital for future major projects.
This follows a year of global expansion for the yard, which operates 13 dry docks around four sites in the north east of England, one shipyard in the north west of England, and a dockyard in Gibraltar.
Sandy Morris, analyst at ABN Amro said: ‘The debt issue is a bit of forward planning. The company has the £51m contract to refit the Costa Classica ship and they needed to commit working capital to that until the finalpayment is made.’ In July this year, Cammell won a 20-year exclusive lease on three dry docks in Marseilles and also spent $7.7m on a 49% stake in Cascade General, a yard in Portland, Oregon that owns one of the biggest floating repair docks in the US. Cammell now looks set to exercise its option to raise its stake in Cascade to 65% and to buy a controlling stake in Varna, a Bulgarian shipyard.
Announcing the bond issue this week, Cammell also reported a first quarter pre-tax loss to31 July of £342,000. This compares with a £702,000 profit over the same period last year, which the company attributed to rising overheads over the 12 months to March 2000 as it increased spending on management, IT and ship designers.
Turnover in the year to April 2000 was £139m, up from £110m in 1999. Pre-tax profits for the year were up nearly 50% to £15.9m.
Tom Docherty, assistant director for the ship builders’ and ship repairers’ association, said: ‘Cammell is expanding, it has got interests in Bulgaria, Marseilles and the US. The firm has a robust record and its shares have done well over the long term.
‘This is all a part of Cammell’s long-term strategy to bring back new builds to Merseyside after six years.’ Belfast shipbuilder Harland and Wolff, meanwhile, is almost halving its workforce to keep the business afloat. The company said it was making an immediate cut of 613 jobs, leaving a remaining 600 staff in place.
The cuts, which come only a few months after 300 jobs were lost, will affect both the shop floor and manag