Italian shipbuilding group Fincantieri is closing down two of its Vard shipyards in Norway due to a lack of work.
The company told TradeWinds it is looking to sell Vard Aukra and Vard Brevik, with 200 workers facing redundancy in total.
The two sites will finish shipbuilding work this month, but it has not yet been decided when they will be shut.
The move is being made to increase cost efficiency and to secure a stable workload for the Norwegian part of the group in the years to come, the company said.
The board has decided to concentrate its shipbuilding activity at three core shipyards in Norway: Vard Brattvaag, Vard Langsten and Vard Soviknes.
Sales process begins
Vard is currently in a sales process for the Vard Aukra facility. Negotiations are ongoing with the municipality of Aukra and potential local buyers.
"The parties have a positive dialogue in the negotiations, and have signed a letter of intent," a Fincantieri spokeswoman told TradeWinds.
"A due diligence work process is ongoing. It is expected that the process will continue in times to come, with a potential final solution in the first quarter of 2020."
Vard has also started considering a potential sale of the business at Vard Brevik, but is in the early stages of this process.
200 staff facing the axe
"In total, it is approximately 200 employees affected by the downsizing of Vard Aukra and Vard Brevik," the spokeswoman added.
"The final number is not available yet, as the downsizing process is still ongoing."
She said employees are encouraged to apply for vacancies at the shipyard group.
Clarksons lists Brevik as building two OSVs for Island Offshore, a boxship for Yara International and a ferry for Boreal Transport, all due in 2020, but it seems likely these have been moved to other yards.
Aukra has no vessels listed currently.
The group has not ruled out an impairment of Vard, bought in 2013.
“The business fundamentals remain intact but we have to take tough decisions,” Fincantieri chief financial officer Giuseppe Dado said after its results were released last month.
Fincantieri said the Ebitda loss for the offshore and specialised vessels business — Vard’s core activity — was €75m ($83.5m) in the first nine months as sales shrank.
Vard also has two yards in Romania, one in Brazil and one in Vietnam.
"The results are impacted by the negative contribution of Vard, which suffers from the ongoing effect of the deep crisis of its reference market of oil and gas, and from the costs incurred following its entrance into the cruise shipbuilding market," Fincantieri CEO Giuseppe Bono said.
