Harland & Wolff has sacked John Wood as group chief executive and announced it will wind down ‘non-core business lines’.
The Belfast shipyard owner has also axed a new fast ferry service between Penzance and the Isles of Scilly “with immediate effect”.
In a trading update on Thursday morning, Harland & Wolff confirmed John Wood’s employment had been terminated on July 31.
The company, which also owns three shipyards in Britain, said it “will be winding down business lines that are deemed to be non-core for the company”.
The announcement followed Harland & Wolff’s failed bid for a UK Government guarantee on £200 million of new borrowing from commercial lenders.
While it has secured a number of potentially lucrative contracts, the company has faced significant up-front costs in scaling up its business to fulfil the orders.
As a result, Harland & Wolff recorded £113m in losses across 2022 and 2023, with rising debt linked to a high interest $115m loan with New York-based Riverstone.
The EDG scheme would have made the UK taxpayer liable for 80% of the company’s £200m loan in the event of default.
But the UK’s new Business Secretary Jonathan Reynolds said there was “a very substantial risk that taxpayer money would be lost”.
In response, Harland & Wolff entered talks with Riverstone for an emergency loan.
The shipyard owner confirmed on Thursday that its loan facility had been increased by another $25m to $140m “in order to improve and stabilise the liquidity position of the company and its subsidiaries”.
It also confirmed it had formally engaged with Rothschild & Co as financial adviser “to assess strategic options for the group”.
The company has also appointed restructuring expert Russell Downs as its new executive chairman.
Mr Downs and a second new appointee, Alan Fort, are due to join the board “as soon as the necessary on-boarding and due diligence procedures have been completed”.
Harland & Wolff chairman, Malcolm Groat, said: “It is regrettable that we have taken the tough decision to terminate the fast ferry, but we need to focus our energies and resources in continuing to grow the core business across our four delivery centres.
“This decision aligns with and brings us back to our fundamental five markets and six services strategy.
“Our ferry service team will be working closely with passengers and other counterparties to ensure a smooth transition out of this business.”
He added: “We are grateful to our lenders in continuing their funding commitment to support Harland & Wolff Group’s ongoing stabilisation and long-term strategy objectives.
“We also look forward to working with the very experienced team from Rothschild & Co to help us achieve that objective.
“The board look forward to Russell Downs and Alan Fort joining us once their appointment formalities are completed and, in the meantime, I wish to place our thanks to John for his invaluable contribution to the Company’s business and wish him the very best in his future endeavours.”