Damen challenges in court accelerated sale of Romanian ailing Mangalia shipyard

Damen Holding BV, the largest creditor of Romania's insolvent Mangalia shipyard, which the Dutch group has managed for years, is challenging in court a decision allowing the shipyard's assets to be sold through an accelerated procedure with successive price reductions, rather than through the repeated auctions at the same going-concern valuation initially requested by creditors.

Damen Holding, the shipyard's 49% shareholder and main creditor, is challenging the decision of the Constanța Court to modify the sale procedure, according to Profit.ro.

Under the original procedure, the shipyard was to be offered in six consecutive monthly auctions at a starting price of EUR 184 million. Under the procedure approved by the court on September 7, the price would be reduced to 75% of the initial valuation if no bidder emerges, and subsequently to 50% if the auction remains unsuccessful.

Damen is seeking the cancellation of the accelerated sale procedure. Union leader Laurențiu Gobeajă has warned that the legal challenge could delay the takeover by a new investor, potentially jeopardising the restart of production and the construction of military vessels financed through the EU-backed SAFE program.

German Rheinmetall is expected to take over the shipyard and build several ships for the Romanian Navy under the EU-backed SAFE scheme.

The union has also warned that prolonged uncertainty could ultimately threaten the future of the shipyard itself. If Damen's appeal succeeds, however, the sale procedure would revert to the mechanism initially approved by the creditors, potentially extending the process further.

Damen Shipyards Mangalia entered insolvency on June 19, 2024, after Damen Holding demanded payment of 69.5% of the shipyard's outstanding debt at the time. Together with other companies in the Damen group, the Dutch group holds approximately 85% of the shipyard's receivables, giving it effective control over decisions taken by the Creditors' Meeting.

The dispute therefore puts the two main objectives of the insolvency process into direct tension: maximising the value recovered from the sale of the shipyard's assets for creditors and finding a new investor capable of restarting operations as quickly as possible.

The Mangalia yard, one of Romania's largest shipbuilding facilities, has been largely inactive amid the insolvency proceedings. The timing of its sale has gained additional importance because the facility has also been designated for defence-related production under Romania's projects financed through the EU's SAFE program.