VESSEL BUILD, REPAIR & MAINTENANCE
Scottish Publicly-Funded Shipbuilder Collapses Owing £12m
A Scottish shipbuilder that collapsed into administration faced “a combination of technical, commercial and funding challenges”.
The venture brought shipbuilding back to Stornoway for the first time in 100 years, but in the end the renaissance was short-lived.
It came to an abrupt close when Michelle Elliot and Graham Smith of specialist business advisory firm FRP Advisory were appointed joint administrators to Coastal Workboats Scotland Limited, based on the Isle of Lewis.
The manufacturer of commercial workboats received £6.2 million from the UK Government and £167,000 from Highlands and Islands Enterprise.
The firm’s most recent accounts filed with Companies House for the year to June 2025 showed over £12m owed to creditors.
I reported that funding body Innovate UK said it is “a responsible steward of public funds”.
Now, assets including a part-complete vessel on a Stornoway shipyard slipway and associated equipment, along with plant, machinery and other property are being marketed.
A spokesperson for the administrator said: “In recent years, the business had been involved in the design and
construction of a UK first Electric Landing Utility Vessel (E-LUV), supported by a shore powered storage system, as part of a wider decarbonisation initiative within the marine sector.
“The project was part-complete at the time of the administrators’ appointment.
“The company experienced increasing financial pressure during 2025 as a result of supply chain delays which have impacted progress on vessel build timescales and rising costs.”
One of its customers, who also provided loan support of £1.6m earlier last year, was Damen, the Dutch shipbuilder.
A spokesperson for Damen told this column when asked whether the electric boat project could be revived: “We are aware of the latest developments at Coastal Workboats. We are currently assessing the consequences, but do not wish to speculate at this stage.”
Despite securing this additional funding and exploring alternative options, the business was ultimately unable to meet its financial obligations and entered administration.
The appointment relates solely to Coastal Workboats Scotland Limited and does not impact associated entities owned by the same directors, which continue to trade independently outside of Scotland, the administrators said.
The spokesperson added: “Following the appointment, the company ceased trading and all five employees at the Stornoway site were made redundant. The joint administrators are supporting affected staff in submitting claims to the Redundancy Payments Service.”
The joint administrators have been “working closely with stakeholders and actively working to realise value from the assets of the business for the benefit of creditors”.
p18 |
www.dockyard-mag.com | March Issue 2026 How the part-complete vessel was expected to look
when finished. (Image: Coastal Workboats)
Michelle Elliot, Partner at FRP and Joint Administrator of Coastal Workboats Scotland Limited, said: “Coastal Workboats Scotland Limited operated in a highly specialised and capital intensive sector and faced a combination of technical, commercial and funding challenges. Our immediate priority has been to support affected employees and to maximise realisations from the company’s remaining assets in order to achieve the best possible outcome for creditors.”
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