Germany's Scholz vows to keep luxury shipbuilder afloat

By Klaus Lauer and Andreas Rinke

PAPPENBURG, Germany (Reuters) -The German government is working on a deal to secure the future of Meyer Werft, a 229-year-old shipyard and one of the world's largest cruise ship builders, Chancellor Olaf Scholz assured workers during a visit to the company on Thursday.

"We all want to secure the continued existence of the shipyard - and with it everything that depends on it," Scholz said in a speech during a meeting of the works council, adding that his government was working with banks and the company's family owners on a solution.

Sources familiar with the talks told Reuters that the government is planning to temporarily take a majority stake in the yard.

The company says it booked orders worth 11 billion euros ($12.3 billion) in recent months, including from U.S. entertainment group Disney.

But the shipbuilder, whose customers pay for the bulk of their luxury liners only upon delivery, has a financing gap of almost 2.8 billion euros due to the delayed effects of a lull in demand during the pandemic.

A statement from the owners said work was being done at full speed on the reorganisation of the company but did not go into detail on what government support might look like.

"The solution that has now been found is not easy for the family, but we have always said that the interests of the company take precedence over those of the family," said CEO Bernard Meyer.

The federal government and state government in Lower Saxony want to contribute 400 million euros in equity, secure bank loans with guarantees, and temporarily take over at least 80% of the shipyard, the sources said.

Part of the deal includes a right of first refusal for the Meyer family in the event of a state exit in future years, they added.

Scholz did not comment on the details of the plan but said any solution would need approvals from parliament and the European Commission.

He described Meyer Werft as an "industrial crown jewel" for Germany and praised the company's ships as "small cities" requiring a range of complex skills to build.



The German economy ministry had said in July that it was considering ways to support the company, which plans to cut 340 jobs in the coming years, leaving it with a workforce of at least 3,100.

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Source: Investing.com