However, a spokesperson from receiver PriceWaterhouseCoopers (PwC) said that a decision would be taken soon. PwC has been working on the case since four months.
The other bids are management buy-out proposals; one financed by Aberdeen Murray Johnstone, the private equity firm, and headed by former executives John Syvret and Brett Martin for the Birkenhead and Tyneside yards; the other backed by Lloyds TSB and led by Dave Gillan, managing director, and Steve Brookfield, finance director, who offered to buy the Birkenhead yard alone.
Aberdeen Murray Johnstone Manchester’s branch refused to comment on the details of its bid, although a spokesperson said: “Existing debts will remain the responsibility of Cammell Laird, as the deal would create a new company, which would use the Birkenhead and Tyneside yards.”
A&P bid faces monopoly claim
The main concern associated with the A&P bid is the potential monopoly the acquisition would create within the ship repair sector. PwC’s spokesperson said A&P’s offer does not raise competition issues because the two firms’ activities differ; A&P being a ship repairer and Cammell Laird a shipbuilder. However, Cammell Laird is involved in refurbishment and repair as well as marine construction.
A spokesperson from A&P, which is 85% owned by Royal Bank Private Equity, the venture capital arm of the Royal Bank of Scotland, commented: ‘We have not been secretive, we told the unions about our bid for Cammell Laird before we released the information to the media.’
Ted Gilbertson, regional head of the Amalgamated Engineering and Electrical Union (AEEU), has sent a letter to Patricia Hewitt, the Secretary of State for Trade and Industry, voicing strong reservations about the A&P bid. He wrote: ‘A&P already owns six UK shipyards, acquiring two more would give them a monopoly interest in the industry.’ In addition, allegations that A&P plans to shut down some of Cammell’s yards and sell off land has left employees fearing further job losses. So far 950 jobs out of a total 1,250 have been cut, with a further 200 losses expected before a deal is closed.
Previously, PwC had expressed concerns that it would not be able to sell the firm because of the financial weight of heavy redundancy liabilities.
Finances spring a leak
Cammell Laird’s difficulties reached crisis in November 2000, when a £51m contract with Italian customer cruise company Costa Crociere to lengthen one of its liner and a £345.5m deal with luxury cruise ship firm Luxus to build two luxury cruise ships both collapsed.
A&P’s first bid for Cammell Laird was aborted in June. It was to be a joint offer with Alchemy, the private equity firm that failed to buy Rover from BMW last year. Discussions between the two parties became acrimonious, when the pair could not agree on price.
- This story first appeared on bfinance.co.uk.
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