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Titanic shipyard at risk of closure as Hunt withholds funds

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Mr Shapps has already held discussions about Harland & Wolff’s future with Jeremy Hunt, Britain’s Chancellor, amid a row between the Ministry of Defence and the Treasury over the company’s funding, The Times reported. 

Harland & Wolff hit back at the report in a stock market announcement on Wednesday, claiming that suggestions Mr Hunt was set to block the loan funding were “misleading and inaccurate”.

The issue centres on the £200m loan guarantee for the company, approved by ministers at the end of last year. 

It will be provided by UK Export Finance, a government agency, but must still pass state aid checks. 

Once approved, the company will be awarded an export development guarantee (EDG) – described on a government website as “a guarantee to your lender in support of finance facilities to unlock working capital”.

However, while export finance loan guarantees usually require companies to secure some capital themselves via banks, in this case, the Government has proposed guaranteeing 100pc of the borrowing. 

It comes after Harland racked up high-interest borrowings from New York-based Riverstone Credit Partners in recent years, reportedly worth $100m. 

One expert on international trade suggested that “risk averse” UK Government lawyers may be wary about approving a loan guarantee for the company, for fear of triggering a complaint by the European Union of unfair competition.

John Wood, chief executive of Harland & Wolff, said: “Our EDG application has not been rejected and continues to be a work in progress.  

“I expect to be providing a fuller update on our refinancing plans in the next few weeks”.

The company’s share price plunged by as much as a third on Wednesday morning.

A Government spokesman said: “We continue to engage with Harland & Wolff on the export development guarantee.”

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