Harsh business climate forces Shetland workboat company under

The ambitious Shetland workboat company Dunberry Marine has been sunk by serious financial problems, ending weeks of speculation about its future.

The business, owned by Ollaberry fishing skipper Chris Duncan, has gone into liquidation with debts of nearly £3 million, although a substantial amount could be recovered from the impending sale of its assets, including the remaining boat Northern Kestrel.

Around 22 men were employed, which had dwindled to 17 by the time the business collapsed last week. The company had to abandon a three-year contract in Morocco, helping build the Tangier Med container port.

Two of the eight Shetlanders on the payroll are still employed temporarily to look after the three-year-old Northern Kestrel in Gibraltar while some have already found work with other operators. Most of the workforce was from England.

In an in-depth interview with The Shetland Times (see tomorrow’s print and Page Suite editions), Mr Duncan said he was “devastated” by the failure of the business but life had to go on. “I’m more devastated for the boys but if I can help them get employment then that’s my main priority at the moment.”

He said one of the key reasons for the company’s demise was set to be the subject of legal action by him, which he could not discuss publicly at this stage.

Other problems included soaring wage costs and income being lost due to a contracting company going bust.

Eventually Mr Duncan had to apply to Lerwick Sheriff Court for a winding-up order, which was granted by the sheriff last Thursday.

The company’s affairs are now in the control of Glasgow-based accountant Liz Mackay of Zolfo Cooper, who has been appointed provisional liquidator to look after the interests of those who are owed money.

One of those, along with the first-in-line creditor the Clydesdale Bank, is Shetland Islands Council which provided a £450,000 loan to help buy the company’s first powerful barge-like workboat in 2008. That boat, the 22-metre Northern Falcon, was sold recently but the council loan transferred to the Northern Kestrel.

Mr Duncan said his company had continued to pay instalments on the loan, which he reckoned was down to around £330,000. That was confirmed by the council as standing at £335,000. At this stage it is not known how much, if any, can be recouped.

The bank is due around £1.65 million while employees are owed around £230,000 in wages and £64,000 is due in PAYE tax and national insurance. Various other creditors are thought to be owed about £1 million.

A spokesman for Zolfo Cooper said it was too early to make any statement about the bankruptcy or the prospects for creditors.

Dunberry Marine was a diversification for 37-year-old Mr Duncan from his main business as skipper and part-owner of the Northmavine-based pelagic trawler Altaire.

Mr Duncan rejected rumours that some of the men had been left stranded in Gibraltar or without wages. Although papers at the court state that crew members will be among the creditors owed money, he said it was not a large amount.

There had been some uncertainty last week about what was happening after the two multicats came off the job in Morocco and crossed the Mediterranean to Gibraltar, which meant there was a delay in getting half the crewmen home, he said.

Eventually on Saturday two of the men delivered the Northern Peregrine across the bay to the Spanish port of Algeciras to hand back to the builders and owners, Neptune.

Mr Duncan explained how a string of problems had overtaken the company, swamping it in debt. Drastic changes in the nature of the workboat industry dealt a serious blow to the profitability of operations, he said, particularly the escalating wages that had to be paid to keep skilled crewmen.

With more companies trying to muscle in on the workboat sector he said there had been stiff competition for contracts but more so for good crews, causing pay rates to rise by around 30 per cent in three years.

“You were having to pay wages that just weren’t foreseeable in 2008,” he said. Since 2010 costs had “gone through the roof”.

Council development chairman, councillor Alastair Cooper, said he was vexed to hear of Dunberry’s demise. “It employed a lot of folk in the North Mainland with marine skills. I see that type of craft as a growth area if we are going to get into renewables in Shetland and I’m vexed that a local operator maybe won’t be in a position to participate in that industry if we get it going.”

Although aware for some time that Dunberry was in crisis he said he understood there had not been problems getting loan repayments from the company before it collapsed. “Obviously we will have to do our best to try and recover our money,” he said.

Full story in tomorrow’s print and Page Suite editions of The Shetland Times.