Sunday, October 12, 2014

Financial Troubles for German Shipyard as RoRo Freight Ferry and Energy Groups Wait Expectantly

New Owners Reported as Delivery of New Vessels Delayed Whilst Contractors Allegedly Awaiting Payment
Shipping News Feature

GERMANY – UK – NORWAY – WORLDWIDE – With comment last week from Deutsche Bank that the German economy, for so long held up as the bulwark of the Euro, was facing troubles, it seems that the competition from foreign yards which has sounded the death knell for ship builders across Europe has come home to roost for Flensburger Schiffbau Gesellschaft (FSG). The situation is causing problems for two British companies, seismic data acquisition group WesternGeco and RoRo freight and passenger ferry outfit Caledonian MacBrayne (CalMac), however hope is seemingly at hand with news of a new owner for the North German yard.

The Flensburg shipyard has apparently found itself in dire financial straits of late with two partially completed new buildings both seemingly overdue for delivery, whilst rumours of cash flow difficulties are said to have been affecting payments to subcontractors. The two vessels held up at the yard are a 20,000 tonne survey vessel for WesternGeco whilst a Scottish quango company which placed the order on behalf of the ship destined to service the Ullapool/ Stornoway service for CalMac is a 9,000 tonne RoPax ferry, the launching of which we reported in March.

The CalMac vessel, Loch Seaforth, pictured above on March 21 when she launched, was due to be completely fitted out by September, whilst FSG has two further new builds on its books for Norwegian offshore operator Siem. The yard also reported earlier in the year it was to construct an LNG powered RoRo ferry for Australian group SeaRoad.

Siem is heavily involved in the search for energy, with a fleet of forty five active vessels and eleven more currently under construction and, according to press reports, the Norwegian group has now purchased a majority shareholding in FSG. Siem was founded by Kristian Siem, former Fred Olsen stalwart and also chairman or director of various other prominent companies including Subsea 7. Although FSG has neglected to put any reports of the takeover on its website Peter Sierk and Frank Bywater, the Managing Directors of FSG, are quoted as issuing a statement saying:

“We are very glad about the new perspectives that open up, as a consequence of this decision. We welcome Siem Industries on board: this time not as a client, but as owner of FSG. This means a great chance for all of us, the shipyard and its employees. Siem Industries is a successful, expanding and financially strong family-owned enterprise. It allows us to continue our successful developments in the global offshore market.”