Riverstone Credit Opportunities Income (RCOI ) is in discussions with Harland & Wolff over a new debt facility after the UK government said it would not act as guarantor to the Northern Irish shipbuilder for a £200m loan it needs to refinance its borrowings.

On Friday, the AIM-listed builder of the Titanic said it was talking to Riverstone Credit to secure alternative new debt facilities beyond the current $115m facility that charges 14% interest and matures in December. Chief executive John Wood also resigned.

The company, which suspended its shares earlier this month after delays in publishing the annual results, needs cash to support its working capital needs after being handed part of a £1.6bn Royal Navy contract for three new ships. These alternative financing arrangements are expected to close within the next few days, it said.

The company said it was talking to key stakeholders, including the government, about existing and future contracts and the long-term capitalisation plan for the business. As part of this longer-term planning, it has engaged Rothschild to assess its strategic options for the group.

Things could get choppy for the £63m debt fund given Harland & Wolff is one of its larger loans – with an unrealised value of $18.3m as at the end of March – but saw an operating loss of £24.7m in 2023. 

Harland & Wolff borrowed money from Riverstone to fund its wind turbine business in 2022. In line with Riverstone’s sustainable or green loans, the interest it pays on the loan is linked to an apprenticeship programme to expand recruitment in local communities.

Riverstone declined to comment on any downside protections it has in place and the implications a cut in the number of apprenticeships would have on the loan’s sustainable credentials.

The 9.5%-yielding debt fund announced in April it would wind down as it struggled to increase its size. It will return investors’ cash over a two-year period as its book of loans matures.

The shares have traded below net asset value for much of the five years since its launch in May 2019 and currently stand at 92 cents, a 13% discount to the March valuation of 106 cents.