Greece’s Elefsis Shipyards Gets US Loan Supporting Renewal of Yard

Port of the Elefsis Shipyards which has largely been idle recently as it works to emerge from bankruptcy (Elefsis Shipyards)

PUBLISHED JUN 27, 2023 3:24 PM BY THE MARITIME EXECUTIVE

 

The efforts to revitalize the Greek shipbuilding industry are getting support from the United States in the form of a development bank loan. The U.S. Ambassador to Greek announced that paperwork has been completed for a $125 million loan that will be used to support the redevelopment of the Elefsis shipyard located south of Athens in Elefsis Bay.

Efforts to start a large shipbuilder and repair facility to service Greece’s commercial fleet date back to the early 1960s when they organized to develop Elefsis. Operations commenced in 1969, and while Greece continues to be a leader shipowner, the yard fell on hard times in part due to lower-priced competition. New management took over the operation in 1997 but the yard fell further into debt and disrepair. It has been at least five years since a commercial ship docked at the yard with reports that its debt exceeded $460 million when it filed for bankruptcy.

North American-based Onex, a private equity firm, has been leading the effort to restore Greece’s shipyard capabilities. They have been running the smaller Neorion Shipyards on Syros successfully for the past few years and moved to take control of Elefsis. Headed by Greek businessman Panos Xenokostas, Onex has said it wants to fully revitalize Elefsis to become the largest shipyard in Greece. Their plan calls for an annual capacity to handle 200 ships and restarting construction operations.

The shipyard has been kept open by the Hellenic Navy for the past few years with repair work. The Navy also has a contract for two ships to be built at the yard. The plan calls for Elefsis Shipyards to be a major supplier to the Hellenic Navy as well as serving the commercial shipping industry.

The loan will be coming from the U.S. International Development Finance Corporation, America’s development finance institution. The funding will be used to continue the restoration efforts. The value of the loan was expanded from the original reports to the Greek Parliament that the yard would receive $102 million to the new value of $125 million.

The loan comes as the Greek courts are expected to issue final approval to Onex’s plans for bringing the yard out of bankruptcy.

In November 2022, Elefsis Shipyards received its first commercial ship in more than five years. The 56,500 dwt bulk carrier Star Cleo operated by Star Bulk arrived at the yard for an overhaul. Officials acknowledged the quick support of the Greek shipping community after Onex received the relevant agreements for the restructuring of the yard and submitted its reorganization plan to the courts.

The yard also completed the lifting of its Number 1 dry dock in April after many years of being out of service. Company executives said it had been a very complex undertaking because of the poor condition of the dry dock. It had been submerged in the yard since at least 2018.

Onex also has entered into a cooperation agreement with Fincantieri to support the revitalization of the yard. The Greek yard will become a supplier and will have support from the Italian company for a range of projects starting with at least two corvettes, with an option for a third, for the Hellenic Navy. The goal is to expand the capacity with a new production line and other facilities so that the yard can participate in projects up to sophisticated frigates. Fincantieri will also support the development of the capabilities for maintenance, repair, and overhaul both for the Hellenic Navy and the commercial shipping industry.