German Government Moves to Save Historic Shipyard Meyer Werft

The German government, led by Chancellor Olaf Scholz, is working on a deal to secure the future of Meyer Werft, a historic shipyard. The government may temporarily take a majority stake to address a financing gap. Scholz touted the shipyard as an industrial jewel and essential job provider.

Chancellor Olaf Scholz assured workers at Meyer Werft that the German government is committed to securing the future of the 229-year-old shipyard. During a visit on Thursday, Scholz emphasized the importance of the shipyard, which has faced financial challenges due to a pandemic-related lull in demand.

Sources revealed that the government plans to take a temporary majority stake in the company to fill a nearly 2.8 billion euro financing gap. Meyer Werft recently secured 11 billion euros in orders, but its business model means customers typically pay upon delivery, exacerbating cash flow issues. The potential government intervention aims to stabilize the shipyard.

The federal and Lower Saxony state governments are considering contributing 400 million euros in equity, securing loans with guarantees, and taking an 80% temporary stake. The Meyer family would have the right of first refusal if the state sells its stake in the future. Scholz did not disclose details, saying the plan needs parliamentary and European Commission approval.

(With inputs from agencies.)