Posted on December 22, 2022
The Meyer Turku shipyard in Finland has been approved for an €80 million ($85 million) recapitalization loan from the Finnish government because of the financial strains placed on the shipyard due to the war in Ukraine. The European Commission approved the move on December 19 saying it fits within the emergency finance measures developed due to the current geopolitical crisis but comes with sufficient safeguards to limit undue distortions of competition.
“The company contributes to the security of supply, national defense, and border control of Finland with its marine technology expertise and production capacity,” the Commission said in approving the move by the Finnish government, which will be completed before year’s end. “Due to the current geopolitical crisis and the consequent cost increases for production and for basic design, the equity and liquidity position of Meyer Turku Oy deteriorated.”
Finland had notified the Commission of its intent to provide the recapitalization support to the shipyard justifying the move within the context of Russia’s war against Ukraine. The commission agreed that it met the criteria accepting that the financing was necessary to ensure the viability and to restore its capital position. The EC regulations however also require that the beneficiary does not unduly benefit from the recapitalization aid by the state and that the aid does not distort competition.
The largest shipyard in Finland, Meyer Turku after its 2015 acquisition by Germany’s Meyer Group was able to build its orderbook and regain a stronger financial position. The shipyard which has a long history is best known in the 1970s as Wartsila becoming a pioneer in the modern cruise industry. However, it faced its first financial crisis in 1990 in part recapitalized by Carnival Corporation and reemerging as Masa-Yards. It was later acquired by Kvaerner, merged with Aker, and later acquired by STX.
The shipyard pioneered the Oasis class of cruise ships for Royal Caribbean International only to lose the subsequent order to Chanteirs de l’Atlantique for the later ships of the class due to financing considerations. However, the yard was acquired by Meyer both to expand capacity as well as to provide a yard to build larger ships beyond the limitations of the location in Papenburg, Germany. Turku in recent years shared the order to build LNG-fueled cruise ships for Carnival Corporation with the German yard but also won the contract to build the new world’s largest cruise ship Icon of the Seas and two sister ships. They are also building a new cruise ship for TUI Cruises. Meyer Turku is only one of four yards in Europe experienced in building large cruise ships.
Seeking new contracts after the pandemic curtailed future orders for cruise ships, Meyer in the summer of 2022 won a contract from the Finnish Boarder Guard for two new vessels. Recently, they announced a new partnership with the Royal Caribbean Group to develop the next generation of eco-cruise ships.
The recapitalization will take the form of a hybrid equity loan. According to Finland and the European Commission, the aim is to strengthen the solvency of Meyer Turku and ensure the smooth continuation of its activities. Even after an agreed downsizing of the workforce during the pandemic, the yard remains a large employer. It was also deemed a critical capability for Finland.