Fincantieri Expresses Interest in Rescue of Greece’s Elefsis Shipyards
Italy’s Finacnatier has expressed interest to the Greek government to join an investment group to lead the restructuring of the financially troubled Elefsis Shipyards. Located close to the port of Piraeus, Elefsis was at one time Greece’s second-largest shipyard but has been caught in years of financial troubles.
The expression of interest came during a meeting with representatives of the Greek government and ONEX Shipyards, which announced approximately two years ago that it would acquire the yard in a prior effort to turn around the financially troubled operation. Speaking after the meeting, Greece’s Development and Investments Minister Adonis Georgiadis reported that big steps had been taken towards restructuring the yard.
Dating back to the 1960s, and located approximately 10 nautical miles from the anchorage in Piraeus, the Greek government considered the shipyard a strategic asset. It had once been a leader in repairs and overhauls as well as carrying out construction projects. New management took over in 1997 seeking to modernize and adapt the operations. With Elefsis’ operations heavily indebted, ONEX proposed a rescue plan for the shipyard in 2019.
At the beginning of 2021, Ernst & Young drafted a new business plan for the yard saying that for the operation to become financially viable the yard would need to receive a significant share of the work from the Hellenic Navy. During its due diligence, the consultants reported that the debts of the shipyard were far higher than earlier reports. Previous estimates had set the debt at between $300 and $350 million, but Ernst & Young reported in February that it believed the true scope of the obligation was nearing $500 million.
ONEX in 2019 had agreed to invest upwards of $400 million over 15 years to acquire and rehabilitate the operations. ONEX cited its track record in rehabilitation failing shipyards saying that New York-based Chatsworth Securities had agreed to also participate in the plan for the Elefsis shipyard. ONEX was working with the Greek government planning to restart operations at Elefsis after completing a bankruptcy proceeding.
The United States had also expressed its support for the ONEX transaction. In June 2020, the U.S. Development Project Finance Agency expressed its support for the plan. U.S. Ambassador to Greece Jeffrey Pyatt said the yard was of strategic importance having provided services to the U.S. Navy’s Sixth Fleet as well as the LNG trade and other commercial shipping in the eastern Mediterranean.