Federal and state governments have given struggling German shipbuilder Meyer Werft a lifeline. According to the Economy Ministry, Germany’s federal government will acquire a 40% stake in shipbuilder Meyer Werft for €200 million.
At the same time, the state of Lower Saxony revealed that it would also buy a 40% stake. To support this, new loan guarantees of up to €2.6 billion are being sought, and the two governments have agreed to cover 80% of the value of these. Banks will cover the remaining 20%.
| The deal is first subject to approval by Germany’s lower Bundestag parliament and the European Commission. “It’s the firm determination of the government – of me personally and of my ministry – that Meyer Werft gets the support it requires to continue to build ships,” Economy Minister Robert Habeck said last week. |
He continued, “Meyer Werft has one of the most advanced and largest shipyards in all the world.” Robert Habeck, German Economy Minister, said that the shipyard is of enormous importance to German shipbuilding.
Shipyard Has a Full Cruise Ship Order Book
It is estimated that Meyer Werft requires more than €2.3 billion in working capital to cover operational losses and restructuring efforts.
The shipyard employs more than 3,000, but it has a full order book for at least the next five years, worth several billion Euros.
German Chancellor Olaf Scholz visited the shipyard last month and was optimistic that a deal could be struck to save its short-term future.
Although Meyer Werft has struggled since the pandemic, its cash flow woes are heavily impacted by typical cruise ship financing methods.
A large proportion of the purchase price for new cruise ships is paid when ships are handed over to cruise line customers on completion.
Last month, Meyer Werft announced it had secured a new contract to build four more cruise ships for Disney Cruise Line, bringing the total number of Disney ships on its order book to eight. The shipyard also recently completed Carnival Cruise Line’s Carnival Jubilee and Royal Caribbean orders.
Overall, the Papenburg shipyard has agreed commitments to build ten cruise ships in the coming years.
