DFDS issues ultra short deadline to P+S Werften

Time is running out for the bankrupt German shipyard P+S Werften, which has two unfinished DFDS ships. DFDS CEO Niels Smedegaard wants the matter settled shortly.

The growing uncertainty regarding the future of the German Baltic Sea shipyard P+S Werften Stralsund has made DFDS issue an ultra short deadline to the yard, if it wants to complete the work on the two ro-ro ships for the Danish shipping company, worth around USD 171 million. DFDS has been caught in the financial collapse of the shipyard, which has brought the construction of the ships to a complete standstill, yet the shipping company is keeping the door open in case the German shipyard is able to complete the ships, custom built for the German and Danish military. However, DFDS CEO Niels Smedegaard admits that time is running out, and that clarification about the shipyard is expected within the next month. Otherwise DFDS will have to find another solution.

“We need clarification before Christmas, at the latest. We hope that things will work out, but there is a big chance that nothing will come of it,” says Niels Smedegaard to ShippingWatch.

Do you want to be kept up to date with the latest developments in Danish and International shipping? Subscribe to our newsletter – first 40 days are free

After the shipyard suspended all payments back in August, DFDS singlehandedly cancelled the contracts, worth USD 162 million, of which USD 73.6 million would have been invested this year. Instead, the commitment has made DFDS perform impairments for USD 4.2 million on the finances for 2012, which the shipping company believes will cover the total loss. P+S Werften owes more than half a billion Euros to its creditors, primarily the German Norddeutsche Landesbank. Word is that negotiations have been underway with interested investors, but no deal has been reached yet to save the shipyard. And Niels Smedegaard does nothing to hide the complexity of the matter.

“If the shipyard is reconstructed, and they get the necessary capital and know-how, then we’d be willing to sit down and see if there is a way to finish the ships. We’ve made it clear where we stand, and they’re in the process of finding out where they stand, but it is, of course, a very complicated situation for them,” he says.

DFDS pulls plug on newbuildings at P+S

Meanwhile, the DFDS CEO believes that the customer process, involving the Danish and German military, will probably have to start over if the two ferries cannot be completed at Stralsund, as originally agreed upon.

“We are talking about custom designed things for the ships, which the military wants, and you get those things on newbuildings. So of course, if this doesn’t work out, we’ll have to sit down with the customer to see what they want to do. Can we build it at another shipyard? Do they want to cancel the whole thing? Are there alternatives, for instance, tonnage that can be modified to fit the requirements?” says Niels Smedegaard.

DFDS has an agreement with the Danish and German military, as part of the so-called ARK collaboration, to transport equipment on a total of six ships, two of which are the ones stranded at the German shipyard.

Do you want to be kept up to date with the latest developments in Danish and International shipping? Subscribe to our newsletter – first 40 days are free

DFDS CEO: Gothenburg is crucial to DFDS

The North Sea weighs down DFDS’ results

Analysts: DFDS under pressure in the North Sea and the Channel 

More from ShippingWatch

Daewoo Shipbuilding makes deal with conglomerate on conditional sale

Shipbuilding group DSME has signed a memorandum of understanding with conglomerate Hanwha Group about a sale of Korea Development Bank’s 50-percent equity position, according to a news agency. The state-owned bank has previously stated that the yard ought to be sold quickly. Updated.

Related articles

Latest news

See all jobs