Dutch shipbuilder Damen has decided to withdraw from a partnership it had with the Romanian government regarding the Mangalia shipyard.
Damen said that the decision was motivated by the fact that the Romanian state no longer respects the agreement regarding the operational and managerial side of the shipyard.
Damen Holding BV, a subsidiary of the Damen Shipyards Group, is a player in the shipbuilding industry in Romania which owns and invests in the largest shipyards in the country – Galaţi and Mangalia – as well as operates the largest naval design company in Romania.
The company’s presence ensures over 3,500 jobs locally, over 400 projects have been completed in Romania and over 30 defence and security vessels have been built for 14 navies and coast guards.
Damen claims that it turned Mangalia into one of the top five shipyards in Europe as far as the offshore industry capabilities are concerned – especially the offshore wind industry.
The Dutch shipbuilder entered Mangalia in 2018 by acquiring 51% of the shipyard from Daewoo Shipbuilding & Marine Engineering after the shipyard fell into financial peril. Soon after, Damen agreed to transfer, without monetary compensation, a 2% stake to the Romanian government thus turning the majority ownership to the state. The operational and managerial operations remained in Damen’s hands.
Recently, the Romanian government passed a new corporate governance law otherwise known as Law 187/2023. This nullified the agreement between the two parties as the new law forcefully removes Damen from the management role at Mangalia.
That, Damen believes, completely invalidates the principles that were the basis of its decision to invest in the Mangalia shipyard.
Following an already difficult collaboration and now facing these unilateral changes, Damen claimed that it faced not only a breach of contract but also a breach of trust on the part of the Romanian state.
The shipbuilder expressed a willingness to remedy the situation before it gave the government a breach of contract notice but no solution was offered by the partner. The company then had no alternative but to issue the notice of termination of the Association Agreement concluded in 2018 with Romania.
Although the company is backing out of the Mangalia shipyard, the decision does not affect the Damen Galaţi Shipyard in which Damen is the majority shareholder.
