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    Harland & Wolff to restructure after victory in arbitration case

    News // September 22, 2000
    The management and board of Belfast shipyard Harland and Wolff has welcomed the ruling of an arbitration panel which holds that more than $31 million is due from Global Marine and payable by 28 September 2000.

    Receipt of these monies will enable a restructuring of the Company to take place with the support of the parent company, Fred Olsen Energy ASA, said the yard.

    It is hoped that the restructuring will provide an opportunity to establish a profitable, viable and sustainable offshore and shipbuilding industry in Belfast, although this will necessitate a significant reduction in the number of employees.

    In this connection, the company will complete a business plan demonstrating the viability of continuing shipbuilding and engineering on Queen's' Island along with the development of Titanic Quarter under the terms of an agreement with the Belfast HarbourCommissioners.

    The formalisation of that agreement is a necessary part of the restructuring to provide Harland and Wolff with the basis to continue shipbuilding, the company said in a statement.

    Formal consultation will commence immediately with the trade unions prior to any final determination of numbers and the timing of their implementation. Application has been made to the Department of Higher and Further Education, Training and Employment for Northern Ireland for a loan to assist with the resultant redundancy costs.

    Commenting on the ruling of the Tribunal, Brynjulv Mugaas, H&W Chief Executive said: "Since first tendering the Glomar Jack Ryan for delivery on 24 July, we have maintained that the yard's scope was complete in accordance with the contract and have beenconfident of a positive outcome to this arbitration. Today's ruling brings to an end the... attempt by Global Marine to bankrupt Harland and Wolff by withholding the delivery instalment due.

    "This decision has galvanised our determination to succeed in the expected Arbitration to recover the balance of monies due by Global Marine for work completed. The claim was for 133.2M of which 65M has been paid on account.

    "A direct consequence of the financial condition in which Global Marine has placed us has been the difficulty in securing major newbuilding orders in the timeframe we would have anticipated. The positive outcome from the arbitration should reduce the uncertainties and restore market confidence in Harland and Wolff, thereby assisting us to bring potential major orders to fruition. We shall continue to strenuously pursue efforts to win short and long term contracts.

    "An indication of its further support for the yard and shipbuilding in Belfast is Fred Olsen Energy's intention to bring another Aker H3 drilling rig, Bulford Dolphin, to the yard for classification work. Bulford Dolphin will be the fourth Fred Olsen Energy rig to come to the Belfast yard, said Mugaas."

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