Shipbuilder Flensburger Schiffbau-Gesellschaft (FSG) and superyacht shipyard Nobiskrug have officially filed for insolvency, deepening the ongoing crisis for their parent company, Tennor Group, and its owner, Lars Windhorst.

District courts in Flensburg and Neumünster have appointed the lawyers Christoph Morgen, Partner, Brinkmann & Partner and Hendrik Gittermann, Partner, REIMER as provisional insolvency administrators. The insolvency filings, submitted to the district courts in Flensburg and Neumünster, follow months of financial instability and reported mismanagement.

The bleak reality of the situation became evident on Monday this week when the SH public utility company threatened to cut off the power supply at the Rendsburg facility due to a lack of payments since 1 December. No immediate action was taken because a federal police ship was still in the dock for repairs.

Workers at both firms are bearing the brunt of the crisis. The shipyards’ financial woes have left around 500 employees in limbo before Christmas, many of whom have already been laid off.

At a recent rally in Flensberg, workers' union representatives alleged repeated delays in salary payments, including November wages and Christmas bonuses. Local sources report that Flensburg Works Council chairman Jan Brandt accused Windhorst of lying repeatedly and breaking promises of timely payments.

Windhorst has become a target of criticism. He has been accused of mismanagement, poor communication and unfulfilled promises. In recent months, workers, unions and politicians have all demanded his resignation.

Schleswig-Holstein’s Economics Minister, Claus Ruhe Madsen, called for Windhorst to face up to his responsibility and sell the shipyards or insolvency would clear the way for new investors. It seems the latter option is now set to come to fruition, with hopes new management will turn the tide.

Investor Lars Windhorst’s Tennor Group took over the FSG in 2019, relaunching it as “FSG 2.0” without old debts or new orders. Despite repeated announcements of future projects, they failed to materialise, leaving the shipyard vulnerable. In 2021, FSG acquired Rendsburg-based Nobiskrug as it filed for insolvency, but the acquisition has done little to alleviate the financial strain.

In the summer of this year, this situation worsened as the German federal government withdrew a €62 million grant intended for the construction of liquefied gas bunker ships at FSG, citing Tennor’s inability to demonstrate sufficient equity capital.

Now, the provisional insolvency administrators are working with the project managers of the RoRo ferry at FSG and the yacht Nobiskrug to resolve both projects. If necessary, the administrators plan to consult with federal and state governments about potential interim financing to bridge construction costs until client acceptance and payment. Meanwhile, they will explore further restructuring strategies for both shipyards.

Insolvency pre-financing has also been arranged to secure financial recompense for 340 workers at the Flensburg site and 140 employees from the Rendsburg facility. This measure will cover payments through the end of January 2025, including the overdue November salaries.

The situation calls for a dramatic change, and the news of FSG's insolvency came as little surprise to many. Government officials are calling for a shift in operations and for the firm to focus on constructing components for wind turbines as demand for offshore wind farms rapidly grows. Some politicians have, however, called for the renowned superyacht builder to diversify its offering to commercial shipping to increase orders.

The latest developments are a stark reminder of the volatility of the market, but they also serve as an opportunity to be constructive and build something new. The situation is crying out for a new owner to step in and support shipyards with a sizeable skilled workforce and an opportunity to rebuild a legacy that has been marred by mismanagement and poor decision-making in recent years. 

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