Friday, August 24, 2012
German Shipbuilder P+S On Brink Of Insolvency
Thu., August 23, 2012
Troubled German shipbuilder P+S Werften, which operates two of the country's biggest shipyards, has asked some of its customers to pay for ships in advance to bridge a liquidity shortfall and avert insolvency, Reuters reported. New Chief Executive Ruediger Fuchs has approached Danish shipper DFDS, passenger ferry operator Scandlines and Greenland's Royal Arctic Line, a P+S spokesman said on Wednesday. P+S had planned to file for insolvency on Wednesday, the spokesman said, the possibility of receiving funds from customers gave Fuchs a couple more days to come up with a rescue plan. The global shipbuilding industry has been suffering from a slump in demand for sea freight and an oversupply of container ships ordered before the global economic crisis. European shipyards have also been hurt by competition from China and Korea. In Germany, deliveries dropped by more than half to 2 billion euros ($2.5 billion) last year. The most prominent victim was Hamburg-based Sietas, the country's oldest shipyard, which filed for insolvency in November, crushed by its debt. P+S Werften, which has about 2,000 employees, ran into financial trouble when it fell behind schedule in delivering new ships, sapping its liquidity, the company spokesman said. It received a German state guarantee for a 152.4 million euro rescue loan, but Fuchs, who was appointed CEO this month, found that those funds were insufficient to finish building any more ships on order.