Cammell Laird Eyes Government Deal With Caution
Tuesday, February 20, 2001
Cammell Laird gave a cautious response to an improved government aid package to help it win a $500 million pound contract to build two cruise ships. The U.K. Department of Trade & Industry (DTI) said late on Monday it would share an extra $100 million risk with the company to underwrite the risk of the contract falling through. The government had previously offered $300 million in guaranteed loans to cover the contract. A spokesman for Cammell Laird said the next step was for cruise company Luxus to decide on whether or not to accept the government's package, which a DTI spokeswoman described as the highest level of risk-sharing the British government had ever undertaken under its shipbuilding credit guarantee scheme. If Luxus agrees to the terms, then Cammell Laird has to decide on whether to accept the aid package. The Cammell Laird spokesman said both companies were currently considering the proposals. "We're certainly two steps away from actually getting the work to build the ships," the spokesman said.
Shares in Cammell Laird have plummeted 65 percent since last August - when the firm terminated a contract with Italian shipping firm Costa Classica following a legal dispute - and on Tuesday was trading unchanged at 14-1/4 pence, valuing the group at around 41 million pounds ($59.31 million). - (Reuters)