Shipyards in Crisis

Mar 31st 09

Over the past year, the small boat-building industry has suffered the worst financial downturn since the fuel crisis of the 1970s – perhaps since the Great Depression. So it is no surprise that the current global economic situation has begun to affect large yacht builders as well.

On March 30, Reuters news agency reported that French yacht builder Couach had applied for court protection from its creditors. “The group had been in negotiations with banks about its 23 million euros in debt for over two months,” Reuters wrote, quoting the shipyard’s statement that, “the current financial and banking crisis annihilated all our efforts…” to restructure the debt. Company Chairman Andre-Jean Goimard has resigned.

Couach, which had yachts up to 50 meters in length on its order books, is a 112-year-old shipyard (formerly known as Guy Couach) located in Gujan-Mestras on France’s Atlantic coast. It employs over 300 people, which Reuters reported have been temporarily laid off.

While filing for court protection is a drastic step, Couach is not the only European yacht builder affected by the worldwide economic crisis. Reuters also reported that the Rodriguez Group, which builds the Mangusta and Leopard ranges as well as custom projects, spoke with banks this winter regarding restructuring its debt, and has postponed its annual general meeting.

Newswires have been buzzing over the past several months about the fiscal health of Italian boat-building giant Ferretti Group, which owns nine different yacht brands including Bertram, Apreamare, Ferretti Yachts, CRN, Customline, Pershing and Riva. On March 26, Reuters reported that a proposed management buyout and debt for equity swap was on the table. “The new proposals will see Ferretti’s management, headed by [CEO] Norberto Ferretti, put 70 million euros of new equity into the business, which will be topped by a further 15 million euros from Mediobanca,” wrote Tessa Walsh of Reuters.

The current fiscal difficulties in the superyacht world are not confined to Europe, of course. Rumors of financial distress at Sensation Yachts of New Zealand have been circulating since fall of 2008. On March 13, The National Business Review reported that the builder of such sailing superyachts as Mari Cha III had dodged two applications to the High Court in Auckland to have the shipyard liquidated (both were withdrawn). “The future of Sensation Yachts has been uncertain in recent weeks...sole owner Ivan Erceg has just been ordered by the Court of Appeal to pay $US 21.5 million to a former client for three unfinished superyachts,” wrote Lucy Cramer inThe National Business Review.

While most privately held custom yacht builders are not disclosing their financial health, industry sources say that orders for new projects have slowed at some of the shipyards. This has led to a situation some owners and captains might call a “silver lining” – the increased availability of new-build slots.

“In the past few years, brokers had to call the shipyards to try to find building slots,” said Laurent Perignon, director of marketing for Camper & Nicholsons, Inc. “The trend has more or less reversed, or balanced, and the shipyards are now calling brokers more than they used to. The situation is more collaborative than in the boom years.”

He said that the time between placing an order and cutting metal has shortened considerably, depending on the shipyard, and that opportunities to buy new yachts on speculation have increased.

“It has brought things back to a normal speed of business,” Perignon said.

 

 

 

 

 

 

 

 

 



Tags: Essentials News 



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6 Comments
  • RYBOVICH MARINA IS BOOMING!
    Posted by Chef Peter_1 04/04/2009 09:56:10

  • On site observation Palma de Mallorca . The crisis is taking bite.

    Had a walk down the Paseo Maritimo in Palma yesterday checking out all the parked megayachts, deserted, wind blasted. Sad sight indeed, almost Dickensonian.... "a cesspool, bubbling and seething with the constant rise of the foul products of decomposition." With grubby, "consumptive-looking ducks" swimming upon it.

    Crossed the street and wandered into the German quarter. Place looks like Baghdad with deep trenches dug around yacht brokerages and Bunkers springing up on every street corner. Green zone forming. Tense, stand clear.

    Over in the Old Town all the British bars are boarded up, air raid sirens wailing. The Queen is preparing to address hungry hoards of dayworkers and sunken eyed stewardess's. Looks like mandatory food rationing.

    Inside the French Quarter the streets were lined with homemade white flags flying proud , with "La Marseillaise' softy playing in the background. They have capitulated .

    All along the seawall in front of Varadaro were gangs of Bn's, sitting on the rail, high fiving, crack'n jokes and building barbeque's , preparing for a Sardine feast.
    Look'n good.....we win again. IN US THEY TRUST
    Posted by monback 03/04/2009 09:44:46

  • There will be more to come, with Superyacht projects beeing 'on hold', unfisnished projets for sale and the entire yacht beeing industry sailing in the doldrums.
    In the UAE, Australia, Germany and foremost Italy all yards have no upcoming clients and we will see this highly 'outsourced' industry tumble over it's own developments. Yards have been growing like mushrooms and since finance companies took over the industry, it was bound to get the dilemma it will face now. AND...there will be no 'bail out' plans, then who will help this 'rich mens' industry, as a yacht is something no one really needs and there won't be a rescue plan or a stimolous package for YUPPIES.
    Posted by Yachttranslines_2 02/04/2009 05:27:52

  • I was at the same symposium Where John Dane of Trinity yachts spoke and as I remember, he said that 12 of those 19 in backlog had been cancelled or suspended.If not for Military Build contracts he would be in trouble.That told me all the Big White Boat buyers have officially left the building..Quickly.
    Posted by MJPD345 01/04/2009 20:56:19

  • Guess we should read between the lines when reviewing the statements of industry professionals.

    Best to recall Warren Buffet's words "It's only when the tide goes out that you learn who's been swimming naked."

    As the tide goes out.....

    I can see what Mr Graham was wearing ! "The credit crunch doesn't affect those who can pay millions and millions for a yacht."

    Caught Norbetto Ferretti !! " The strong growth witnessed in the last years will continue into the future "

    Poor Doug Sharp has goose bumps !!! "The industry is bound for growth no matter the effects of outside influences "

    Ah yes, Charlie Baker needs a sun tan !!!!! " This is a very exciting time for all involved in the industry. We see the market being very stable for the foreseeable future "

    Is that Gérard Rodriguez ?? OH My !!! Pass that man a towel.

    The tide continues to ebb.....and look at all those industry profesionals out on the sand bar !!
    Posted by slug 31/03/2009 23:39:49

  • John Dane, president of Trinity Yachts, reported at the Superyacht Symposium in Miami a couple weeks ago that Trinity had 19 backlogged yachts last July, but hasn't signed a boat since. They had 10 serious inquiries in Monaco last September, but a month later at FLIBS, there were none and the Monaco inquiries were down to 2. Dubai and Abu Dhabi, none. He does feel, however, that custom builders are safer than production.
    Posted by Kate_1 31/03/2009 21:09:03

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