Top-level federal officials in Germany, including Chancellor Olaf Scholz, visited the Meyer Werft shipyard headquarters in Papenburg to acknowledge a restructuring deal has been reached, appearing to solve the shipyard’s financial troubles that have made headlines in recent months.
The personal visit by Scholz and Lower Saxony’s Minister President Stephan Weil on August 22, 2024 followed a restructuring report from auditing and consulting firm Deloitte.
A statement from the officials indicate that final details still need clarification, but that work on the “realignment of the company” will proceed at full speed.
The Meyer Werft Group, with two shipyards in Germany and one in Finland, is a key player in the construction of cruise ships.
The shipyard has longtime cruise clients such as Disney Cruise Line, Royal Caribbean, Carnival Cruise Line, and Silversea Cruises, among others. Its most recent ship deliveries include Silversea’s Silver Ray, in May 2024, and it is putting finishing touches on Disney Cruise Line’s Disney Treasure, set to debut in December 2024.
Meyer Werft does not suffer from a shortage of new-build orders, and has a thriving order book with a value of about 11 billion euro ($12 billion USD).
Carnival Cruise Line is among brands that have recently placed orders for mega-ships. In February and March of 2024, the cruise line announced contracts with Meyer Werft for two Excel-class ships. The vessels are slated to enter service in 2027 and 2028.
Meyer Werft also is in the process of building Disney Cruise Line’s Disney Destiny and Disney Adventure, and has orders for four additional ships for Disney, slated for delivery between 2027 and 2031.
The government officials met with Meyer family members along with CEO Bernd Eikens, who took the helm of the company from family patriarch Bernard Meyer in August 2023, and Ralf Schmitz, a restructuring professional the company tapped for the financial plan.
“We are grateful that such a great partnership of responsibility between the shipyard, the family, politicians, banks and employees has succeeded in ensuring the future viability of the company,” Bernd Eikens and Ralf Schmitz said in a joint statement.
“We now have the opportunity to put the crisis behind us, make the shipyard competitive again and focus on profitable growth,” they added.
The shipyard’s financial struggles are tied to the temporary lull in production during the Covid era and to price increases in shipbuilding materials since the pandemic.
Financial Process Puts Shipyards at Disadvantage
Further problems stem from the industry’s financing structure, whereby shipyards typically receive just 20% of the cost of an order payable upfront and the remainder when a ship is completed.
The process requires shipyards to finance most of the construction costs. It is unclear how much money Meyer Werft is seeking in government assistance, but some reports put the number at 2.3 billion euros ($2.5 billion USD) in loans and 400 million euros ($445 million USD) in capital.
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“The willingness of the federal and state governments as well as our associated commercial banks to support us in the form that has now been agreed also shows that we have achieved a special position in shipbuilding with our company over decades,” said Bernard Meyer, former CEO of Meyer Werft.
The restructuring agreement appears to have a buy-back provision that could eventually return control of the shipyard to the family, although details have not been forthcoming.
Meyer Werft’s headquarters is in Papenburg. The company has been owned by the Meyer family for seven generations. Other shipyards are located in Rostock, Germany, and Turku, Finland.
