The Ritz-Carlton Yacht Collection is leading a rescue plan for Spain’s biggest privately owned shipyard.
Ritz-Carlton’s fledgling cruise subsidiary has teamed up with majority shareholders of Astilleros Hijos de J Barreras to enable the yard to proceed with restructuring and complete work on the hotelier’s inaugural cruiseship.
Cruise Yacht Upper Holdco Ltd (CYUHL), a Maltese entity controlled by Ritz-Carlton that is also the yard’s main client, has teamed up with two shareholders that own more than 75% of the financially struggling shipbuilder.
The agreement with Spanish fishing vessel company Albacora, which owns 24.5% of the yard, and PMI Holdings, a subsidiary of Mexican oil company Pemex, which owns 51%, “solves the current situation at Hijos de J Barreras and enables the future of the shipyard to commence”, according to a statement.
“This agreement is part of the overall restructuring needed by Barreras and is based on the temporary appointment of external, experienced teams that will work towards Barreras’ continuity.”
A condition of the deal is the involvement of new management teams and directors.
These are tasked with ensuring the completion of Ritz-Carlton’s inaugural cruiseship, called Evrima, “as well as other viable contracts”.
“It will also form the foundation for Hijos de J Barreras to win new, profitable business in the future,” the statement added.
Douglas Prothero, chief executive of the Ritz-Carlton Yacht Collection and CYUHL, said: “Our team has delivered over 150 cruise vessels and we are looking forward to working together with the new shipyard management on the planning and work ahead.”
‘Paralysing debt problem’
Spanish press reports suggested the Vigo shipyard has a debt problem that has paralysed work since October, and that an agreement with creditors needs to be reached by 2 February to prevent bankruptcy.
Much of the debt is allegedly owed to suppliers with which the yard has built up debts of €25m ($27.7m).
Any recapitalisation programme could affect the yard’s former chairman, Jose Garcia Costas, who holds 24.5% of the shares.
He is not named party to the agreement with Ritz-Carlton, but could take part later.
“Stakeholders who to date have chosen to not contribute to this solution will still have the door open to participate in the future,” the statement said.
Ritz-Carlton founded its cruiseship subsidiary in June 2017 with the backing of private equity firm Oaktree Capital Management.
It intended to build three specially designed small cruiseships, 190 metres long, with 149 suites to accommodate up to 298 passengers. The Malta-flag vessels will have 246 crew members and a maximum speed of 17.8 knots.
So far, firm orders have been placed for two ships. Delivery of the first vessel, which was scheduled for the fourth quarter of this year, has been delayed until the middle of 2020.
