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Oyster Yachts in Financial Administration

Discussion in 'General Sailing Discussion' started by Fishtigua, Feb 5, 2018.

  1. Fishtigua

    Fishtigua Senior Member

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    This taken from Yachting Monthly's website:-

    The British luxury yacht builder Oyster Yachts is reported to have gone into liquidation as of 1600 on Monday 5 February 2018.

    Staff are said to have found out that all employees are to be made redundant in the news this afternoon. A spokesman for the company confirmed that a statement would be made on Tuesday 6 Feb but would not confirm or comment on the news. Staff have been asked to come into work tomorow

    Oyster Yachts recently launched their new model, the Oyster 745 at boot Düsseldorf, the German Boat Show at the end of January.

    Sources have said that 160 staff at the Southampton boatyard have been told they will be losing their jobs.

    Oyster recently had the biggest sailing yacht on show at international Dusseldorf boat show but is rumoured to have gone into liquidation, with the doors closing today at their Southampton yard.

    Recently embarking on a major project to build several 118ft superyachts, boosting jobs in the area, the quintessentially British brand announced an order book in excess of £80m worth of business only a few months ago. The company recently publicised the progress of some new moulds for their Oyster 825 and 895 models:

    [​IMG][​IMG][​IMG][​IMG]

    [​IMG]Oyster Yachts@OysterMarine

    Exciting times at #OysterYachts as the new deck tooling takes shape. Through smart #engineering, this #deckmould can be used on either the new #Oyster895 or the #Oyster835. To find out more and to view our current fleet visit: http://bit.ly/OysterYachts. #BritishBuilt #Superyachts

    4:22 PM - Jan 5, 2018
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    HTP Investments, a Dutch investment firm, are rumoured to have withdrawn financial support for the company.

    Oyster Marine was acquired by HTP Investments BV (HTP) for just under £15 million in 2012. The company was sold in 2008 by founder Richard Matthews to private equity company Balmoral Capital for about £70 million. The acquisition included the Oyster Group companies Oyster Marine Ltd, Oyster Brokerage Ltd and Southampton Yacht Services Ltd.

    Industry sources suggested that the company may have lost money in dealing with structural problems identified following the sinking of the Oyster yacht Polina Star III, which lost her keel and sank off the coast of Spain in 2015.

    Oyster Yachts made the following statement at the time:

    ‘Since the tragic loss of Polina Star III – Oyster 825-02 – in early July, Oyster has worked with a team of independent experts to review the design and construction of the Oyster 825. Since the recovery of Polina Star III from the seabed recently we have also worked with the various representatives of the Owner’s insurance Company and other stakeholders.

    ‘The objective of this work was to establish beyond doubt how and why the loss occurred, the first of its kind in Oyster’s long history. First, it is important to note that the Oyster 825 design took into account Classification Society Rules and other standards and has been independently verified. Secondly, our inspection of the other 825s (not including Polina Star III) highlighted a possible weakness in the process used to build the inner structure of those vessels. This process has not been used on any other Oyster Yacht built over the last ~40 years and will not be used again.’
  2. Pascal

    Pascal Senior Member

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    What a shame...

    Could it be partially a case of growing too fast? Just a few years for of their line was in the 60' range wasnt it? Building 118 footers is not quite the same...
  3. Scott W

    Scott W Member

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    Was just looking at an Oyster a couple of weeks ago. The broker highlighted several times how financially sound Oyster was. In his defense, he might have been sincere. It would be interesting to know if other people in the industry saw the signs of financial distress prior to this announcement.
  4. olderboater

    olderboater Senior Member

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    Oyster denies being in liquidation. They do acknowledge making all employees redundant.

    Regardless, it seems to be a good example of a company convinced an angel is going to come through for them, either a current or new financier. I've seen situations where a company was in non-compliance of covenants and felt certain they'd be granted an exception but the key day hit and none came and the entire loan amount became due.

    Now, it seems they're trying to throw and depending on a Hail Mary. Well, Tom Brady threw a great one a few days ago, but the odds are always against them. I suspect they feel the value of the company is far greater than it really is. As pointed out above, it sold cheap last time and likely has no net value today. Lenders just not willing to extend them further and owners not willing to put more money in. Another venture capital stranglehold, choking a company to death.

    Now, the big question. Will a new angel step in soon enough to save the company and the current owners and lenders agree to something or will things sit like this, their reputation get destroyer, lawsuits ensue, and very little value remain?
  5. Fishtigua

    Fishtigua Senior Member

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    OB, I feel an angel will be found, they've got $20m of orders on the books already. I think the venture capitol investors from Holland are the ones who have run out of funds to keep it going, not the yard doing a poor job.
  6. olderboater

    olderboater Senior Member

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    If investors keep having to put more funds in to stay afloat, there's a problem with the business itself as well.
  7. German Yachting

    German Yachting Senior Member

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    Unless it’s a cash flow thing and the PE firm decided to pull the LOC.
  8. olderboater

    olderboater Senior Member

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    But cash flow things are a problem with the operations. Yes, the PE gets cold feet and bails, but generally they do that only after being given reasons to do so. Some projection or commitment has been missed, likely more than one time. For a PE to pull the plug, they must consider continued operations more risky and costly than shutting down.
  9. German Yachting

    German Yachting Senior Member

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    That’s true but might also not be indicative of the overall profitability of the company. They might need to get more progress Billings from the owners to help cash management since it is a fairly capital intensive business. What you said is most likely the case but there’s always the off chances of a change in investment strategy with the PE firm or their financial position.
  10. gr8trn

    gr8trn Senior Member

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    Oyster sailing vessels are very nice. They are also very old designs generally speaking. They have limited appeal. They are very expensive for the marketplace. I wish the well, I would not kick one out of my slip but there are too many options that fit the bill as well or better.

    I cannot afford a new Oyster 475, I can afford an Xc 45. They are overprice I think. How does this enter into the equation?
  11. Scott W

    Scott W Member

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    Oyster's assets are currently for sale including all the intellectual property and trademarks. The owner's representatives (including the skipper) of S/Y Polina Star - the vessel that suffered a catastrophic keel failure which was the root of Oyster's financial problems - have created a website detailing their version of events. It's a damning account of Oyster's management in dealing with the keel problem before it failed. The website also raises some interesting questions about the financials of the shipyard. I would supply the link to the website, but I'm not sure that's permitted. A googlesearch of 'Polina star III' should return the site, if you're interested.
  12. BCookSail

    BCookSail New Member

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    The site really highlights the quality problems they are having of recent years. The survey was quite an illuminating read. I personally would not want my keel constructed in that way anyway, opting for a integral keel but it really sounds like this area of the build was very poor.
  13. German Yachting

    German Yachting Senior Member

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    Oyster has found a new buyer
  14. Fishtigua

    Fishtigua Senior Member

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  15. chesapeake46

    chesapeake46 Senior Member

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    From the article: "despite it having its largest-ever order book, thought to be about £10m higher than the £70m reported for 2016."

    Am I alone in thinking that I may not still want an Oyster Yacht if the company is being restructured ?
    If they are going to change the production process ?
    I understand they need to make changes for profitability's sake but if I were one of the future customers in that order book and I had based my need for an Oyster Yacht on the quality and performance, what guarantee do I have that the " new" product will live up to the old standards ?

    Of course, the "new " product might be better, but I think I'd want to see one or two roll off of the production line first.
  16. Scott W

    Scott W Member

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    Only the very early production units of the Oyster 825 (I believe just the first three or four boats), employed this very suspect hull design and manufacturing process. None of the other Oyster models used this design and manufacturing technique and the subsequent 825s were built differently. Prior to the Polina Star incident, Oyster's reputation, which was well-deserved IMO, for quality was impeccable (if also very pricey).
  17. chesapeake46

    chesapeake46 Senior Member

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    That's my point. If I ordered an Oyster yacht based on the impeccable quality and reputation and find the new influx of money/management changes the quality to make the production more streamlined and efficient, will it still be the impeccable quality I ordered ?
    Will I still even want the " new and improved" Oyster yacht.
    I'm not even allowing for the " keel fell off" scenario !
  18. Capt Ralph

    Capt Ralph Senior Member

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    New owners are not going to take a brunt of heat on the keel issue.
    I'd buy the company, keep all intact and drop that one model.
    Kinda got the idea the company was in the black till the bow, oh, er, da keel fell off.
  19. olderboater

    olderboater Senior Member

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    Keep in mind that the new owner has zero experience in boat building.
  20. Capt Ralph

    Capt Ralph Senior Member

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    Who needs to.
    It was doing well till the keel fell off. Pay some due bills to keep the suppliers happy. Maybe not a bunch of returns quickly but keep the popular and reliable lines and orders intact.
    Could be back on line and retain the orders coming without a big schedule hit. Don't mess with a proven product.