Italian shipbuilding giant Fincantieri is aligning with Greek partners to revive Elefsis Shipyard, a debt-ridden facility west of Athens.
Elefsis becomes the third Greek shipbuilding and ship-repair facility that has attracted investor interest in a planned debt restructuring and turnaround, after the historic Skaramangas yard and Neorion Shipyards.
Fincantieri’s interest in Elefsis is understood to focus on potential warship contracts, to judge by the fact that it was Giuseppe Giordo, general manager of the group’s defence unit, who held talks with the government in Athens on Thursday.
According to a Greek government statement, Fincantieri wants to team up with ONEX Technologies Group, a Greek-led but New York-based company that had already been groomed as a white knight for Elefsis.
ONEX has a proven track record, having already been credited with the turnaround of Neorion, a former loss-making ship-repair facility on the Greek island of Syros.
Drip-fed by the navy
The Greek government offers its full backing to the Fincantieri-ONEX venture, which is expected to soon submit a financial rescue plan to Greek courts.
Under the scheme, creditors including the state, lenders and suppliers are to forebear part of the company’s debt, which was thought to exceed €300m ($349m) last year.
Elefsis has been kept afloat by a contract with the Hellenic Navy, which was drip-feeding the yard with cash in the hope of eventually taking delivery of two much-delayed missile ship newbuildings.
An attempt to find an investor for the yard in 2019 led nowhere.
Founded in 1968, Elefsis stretches over an area of 250,000 square metres that is about an hour’s drive to the west of Athens. It has three conventional floating docks, the biggest of which can handle construction, repair and modification of vessels, with a capacity of up to 120,000 dwt.
The company had been led for more than 20 years by entrepreneur Nikos Tavoularis, a former collaborator of magnate Stavros Niarchos, as part of a business group that also included Neorion.
Tavoularis, once the biggest shipbuilding player in Greece, saw his industry decline in recent decades, partly due to rising labour costs and a strong euro following the country's adhesion to the single European currency.
While eventually bowing out of Neorion, Tavoularis had long refused to withdraw from Elefsis, driving a hard bargain to do so. He died in July this year at the age of 93.
Back to profit
Fincantieri's potential expansion move comes at a time when the shipbuilding giant crosses back to profit after crippling losses it had to endure during the global Covid-19 pandemic.
The Italian shipbuilder posted a €7m ($8.14m) profit for the first six months of 2021, rebounding from a €137m loss suffered during the same period last year.
Revenue improved 28% to €3.03bn from the same period of last year, primarily due to Fincantieri's shipbuilding segment returning to full production.
The shipbuilding division, which makes ships for cruise giant Carnival Corp and other majors, earned €2.92bn in revenue, up from €2.03bn for the first six months of 2020.
