Insolvency Threatens Damen Mangalia Shipyard’s Future

The ongoing dispute between Damen and the Romanian government regarding the Mangalia shipyard on the Black Sea took a significant turn as a court in Constanta initiated insolvency proceedings. An administrator has been appointed to seek a recovery plan for the shipyard, which Damen took operational control of in 2018, with the government retaining a 51 percent ownership.

Originally known as the 2 Mai Mangalia Shipyard and operational since 1976, the yard saw a joint venture with South Korea’s Daewoo in 1997, leading to the delivery of over 200 ships in the following decade. Damen, highlighting the yard’s three large drydocks and its status as the largest in its group, had plans for expansion and further investment in outfitting capabilities.

However, Mangalia faced challenges due to the shipping industry downturn and increased competition from Asian shipyards. After the pandemic hit, Damen proposed reorganizing the yard, which was met with resistance in Romania. The Romanian government passed a law in June 2023 granting it control of Mangalia and limiting Damen’s involvement, leading to Damen seeking international arbitration in April 2024 to end the joint venture. The shipyard filed for bankruptcy in May, with the court deciding to proceed with insolvency and aiming to define a recovery strategy by studying the business’s weaknesses.

Source .