News & Analysis

Romanian government hands control of Mangalia Shipyards to Dutch group Damen

Romania’s government has ceded managerial control of the Mangalia shipyards to the Dutch group Damen. In exchange, Damen has transferred a two per cent stake in the shipyard to the Romanian government, which brings the Romanian state’s total shareholding to 51 per cent. The deal was approved in a cabinet meeting on July 17, and an emergency ordinance (OUG) was issued immediately to ensure its legality.

Specifically, the OUG allows the Romanian state to hand managerial control to minority, private shareholders in state-owned enterprises – not just the Mangalia shipyards – if those private shareholders have the “financial and technical capacity to develop the enterprise.”

The majority stake in Mangalia was for many years held by the Korean Daewoo Group, which in late 2017 agreed to sell its 51 per cent shareholding to Damen for a figure thought to be in the region 26 million US dollars. However, in January 2018 Romania’s then prime minister, Mihai Tudose, announced that the Romanian state would exercise its first option for the Daewoo stake. Doing so would have made the Romanian state the sole shareholder.

At the time, Mr Tudose claimed that the move was necessary in order to reinvigorate the Romanian defence industry. “The navy needs new frigates,” he said on January 10. “Why don’t we build them ourselves?”

Mr Tudose resigned as prime minister a week later after the ruling PSD-ALDE coalition withdrew its support for his government.

The new Romanian government of Viorica Dancila – at the suggestion of the new minister of the economy, Daniel Andrusca –  ditched the idea of fully nationalising the shipyard and began negotiations with Damen. In March it was agreed that the Romanian state would approve Damen’s purchase of Daewoo’s stake, dropping its pre-emption rights.

“Together with the great support of the Romanian government, Damen will restore the financial health of the Mangalia shipyard, rebuild employment numbers and increase activity levels of high-end projects,” said Damen’s CEO René H. Berkvens. “In the meantime, Damen will facilitate a smooth transition and keep talented and skilled resources meaningfully employed.”

The Mangalia shipyard is located on the Black Sea coast, and spreads over an area of 980,000 sq m. It boasts three drydocks with a total length of 982 metres and 1.6 kilometres of berthing space. The docks, with a width of between 48 and 60 metres, will provide Damen with the capacity to cater for the largest maritime vessels and structures.

Damen already owns a shipyard in Romania, in Galati on the banks of the Danube, which is currently the group’s largest shipyard.