On Thursday, during a trip to Meyer Werft to meet with workers, Olaf Scholz, the German Chancellor, assured them that the German government was working on a deal for the shipyard, which is 229 years old and is one of the largest cruise ship builders in the world.

Scholz, in an address to the works council said: "We want to ensure the continued existence and success of the shipyard and everything else that is dependent on it." He added that his government worked with the banks and family owners of the company on a solution.

According to sources familiar with the discussions, the government plans to temporarily acquire a majority stake.

In recent months, the company has received orders totaling 12 billion euros (11 billion dollars) from Disney in the U.S.

The shipbuilder has a funding gap of nearly 2.8 billion euro due to delayed effects from a slowdown in demand during pandemic.

In a statement, the owners stated that the company was undergoing reorganisation at full speed. However, they did not elaborate on how the government might support the project.

Bernard Meyer, CEO of Meyer Group, said: "The solution now found is not easy for family members. But we have always maintained that the company's interests take priority over the family's."

Sources said that the federal government and the state government of Lower Saxony are looking to invest 400 million euros as equity, guarantee bank loans, and take temporary control of at least 80% the shipyard.

They added that the Meyer family would have a first right of refusal in the future if the state were to leave the country.

Scholz didn't comment on the specifics of the plan, but said that any solution would require approval from the European Commission and Parliament.

He called Meyer Werft the "industrial crown" of Germany, and described its ships as "small towns" that require a variety of complex skills.

In July, the German Economy Ministry had stated that it was looking at ways to help the company. The company plans to reduce 340 jobs over the next few years and will have a minimum of 3,100 employees.

(source: Reuters)