Harland & Wolff (H&W), the owner of the shipyard that built the Titanic, is close to reaching a government-backed rescue deal with a Spanish shipping industry group.
Sky News can reveal that Navantia has won approval from Downing Street to acquire H&W’s four UK shipyards in a deal which could be formally agreed as early as next week.
If confirmed as expected, the deal would save more than 1,000 jobs in the UK manufacturing industry.
Sources in Whitehall warned that a deal had not yet been finalized and remained subject to change, but acknowledged that a framework agreement had now been reached.
Under the terms of the deal, they said, Navantia would have to pay tens of millions of pounds for H&W’s assets.
It also won government support for a renegotiated contract held by the Belfast-based company to build three Fleet Solid Support (FSS) ships for the Royal Navy.
The precise details of the revised contract were unclear on Saturday morning, although an insider said the government and Navantia had “compromised” on a request from the Spanish company for an improvement in its value of 300 million pounds sterling.
The original deal struck by H&W, whose London-listed holding company collapsed in September, was described by a government source as “unprofitable”.
If the announcement of a bailout deal comes before Christmas, it would represent good positive economic news for Sir Keir Starmer’s administration after a private sector backlash against the October Budget.
In recent weeks, the government has worked with the city’s lawyers to review the Defense Ministry’s revised contract and determine whether it would comply with EU state aid rules.
H&W’s collapse into administration came after a call for taxpayer support was rejected by ministers.
Navantia, which already partners with H&W on the Royal Navy contract, has been providing financing liquidity to the company on a weekly basis since the company’s application for administration.
The British and Spanish governments have also started discussions on the draft agreement.
A final agreement is likely to incorporate Navantia’s employment guarantees.
H&W’s four shipyards are in Belfast; Appledore, Devon; Arnish on the Isle of Lewis; and Methil, Fife.
Rothschild bankers have been carrying out a sales process since September to assess interest in the company and its assets.
Founded 163 years ago, Harland and Wolff built the most infamous passenger ship in maritime history, with the Titanic sinking on her maiden voyage across the Atlantic in 1912.
The Department of Business and Trade and Downing Street have been contacted for comment.