Sources Say Germany to Take a Big Stake in Meyer Werft
The German government plans to take a temporary majority stake in Meyer Werft, one of the world's top cruise ship builders, as part of measures to support the company, sources familiar with the matter told Reuters on Thursday.
German Chancellor Olaf Scholz is said to visit shipbuilder Meyer Werft today, raising union hopes for government support for the company which is battling to fill a 2.7 billion euro ($3 billion) hole in its finances.
Meyer Werft, one of the world's biggest cruise ship builders, builds around two ships annually at a cost of at least 1.5 billion euros each. The company has orders in the pipeline, including from Disney but needs to raise almost $3.12 billion in order to help finance the construction of its luxury liners.
The company pre-finances the construction of its luxury liners because customers generally pay for the bulk of the order on delivery. Yet following a near-collapse in orders during the pandemic, the company finds itself struggling to bridge a gap in its finances.
"We expect the chancellor to bring good news with him," Thomas Gelder of the IG Metall union told Reuters. "It's a very positive sign for the workforce and the region, and also a sign of appreciation that Mr Scholz is coming."
The state premier and the economy minister of Lower Saxony, home of the shipbuilder in Papenburg where the more than 200-year-old company is based, will also attend for a works council meeting, Meyer Werft said in a statement on Wednesday.
A press conference is planned after the meeting with Scholz, first reported by the Handelsblatt business daily.
Meyer Werft needs 2.3 billion euros in working capital and 400 million euros in equity to cover past losses and restructuring costs, according to its restructuring chief.
The German economy ministry said on July 3 that the government was looking into possible state support for Meyer Werft, which also plans hundreds of job cuts as part of its survival plan.
"In principle, there is a basic agreement that everyone wants to help the shipyard," said a company spokesperson. "But there are still many aspects that remain unresolved."
(Reuters)