Elefsina Shipyards: The details of the consolidation plan

Today is the deadline for the public consultation on the draft bill entitled “Reorganizing the Elefsina Shipyards”, which the Minister of Development and Investments, Mr. Adonis Georgiadis, is pushing for a vote in the Parliament.

The reorganization plan of the Elefsina Shipyards (NBEE) forms a sustainable model for the restart of the Elefsina Shipyards as it foresees an immediate investment of 100 million dollars, safeguarding 600 jobs, compensations of 13.4 million euros for the repayment of 100% of the remaining debts to employees, the creation 1,400 new jobs within 3 years, additional revenue of 1.1 billion euros for the Greek State (direct and indirect taxes, insurance contributions) over the next 25 years and finally strengthening the Greek Economy with more than 1.6 billion euros which will be directed to domestic suppliers and the Greek Industry.

In more detail, according to the relevant informative text, the Elefsina Shipyards Consolidation Agreement provides for:

The revival of the Shipbuilding Industry, through the restart, consolidation and upgrading of the Elefsina Shipyards significantly strengthening both the Economy and the geopolitical position of Greece, as the Elefsina Shipyards will be a pillar for the National Defense Industry.

The Agreement gathers the almost unanimous support of the workers at the Elefsina Shipyards (percentage 99.7%), as well as the most important stakeholders and organizations (Elefsina Municipality, EBEP), which confirms its mutually beneficial nature.

The restart of the Elefsina Shipyards, through the Agreement, will give a significant boost to employment and the economy of the wider region of Western Attica.

The Agreement provides a sustainable solution to the huge problem of the accumulated debts of the Elefsina Shipyards. The American Development Bank’s (DFC) decision to financially support the project is a strong vote of confidence in the Agreement and the prospects of the Elefsina Shipyards.

The Strategic Agreements secured by the ONEX Shipyards & Technologies Group, as well as the significant investments it will make in equipment, Research and Development will bring Elefsina Shipyards to the forefront of the Shipyard Repair Sector, worldwide.

Key points of the Resolution Agreement

Creation of two new companies (“COMMERCIAL” and “DEFENSE” or “NEW COMPANIES”) following the ratification of the reorganization agreement, which will take over the transferred assets and liabilities of the shipyard.

In the COMMERCIAL company (ONEX ELEFSIS Shipyards Industries) to which a significant part of the NBEE Assets will be transferred, it is expected that funds up to the total amount of 170,000,000 euros will be invested after the transfer. In the Commercial company, ONEX Elefsis financing is based on DFC ($102 million) as well as ONEX Group equity (€20-80 million), while it can be increased according to needs, in a second phase.

In the DEFENSE company (ONEX ELEFSIS Naval Maritime), the activity to be developed will concern the construction of warships and other floating equipment, both on behalf of the domestic defense industry and foreign customers. Financing will be provided by Fincantieri, Italian financial institutions and ONEX with whatever capital is required to ensure the smooth execution of the company’s programs.