German Shipbuilder FSG Files for Insolvency
Ferry shipbuilder Flensburger Schiffbau-Gesellschaft (FSG) has filed for "self-administered" insolvency, a German bankruptcy process in which the existing management team remains in control while the company restructures its finances.
Even before the COVID-19 shutdown, FSG had been losing money for some time, and last year it was rescued from the brink of bankruptcy by a German private investor. It posted a full-year loss of $120 million for 2019, driven primarily by delays and cost overruns on the ro/pax ferry W.B. Yeats. The second vessel in that series has also been delayed, and shipowner Irish Continental Group is said to be considering its options for taking the order to a different shipbuilder - even though it has already put 20 percent down.
In February, FSG voluntarily agreed to cancel an additional $475 million contract for two ferries for TT-Line Tasmania, part of what then-managing director Alex Gregg-Smith described as FSG's "reorientation."
Much of FSG's workforce has already been furloughed under the German "short-term work" unemployment scheme for some months, according to NDR. Production at FSG has been suspended since mid-March due to the disruption caused by the COVID-19 outbreak; FSG said that the international shutdown made operations difficult for the yard, its subcontractors, suppliers and client representatives. Gregg-Smith said that it was FSG's intention to restart as soon as possible once the acute coronavirus threat was over.
FSG recently appointed a new managing director, Martin Hammer, who was involved in a turnaround effort as head of P+S Werften in 2012.