BiFab was a ‘rotten deal’ for taxpayer

Minority stake for public, £37m ... majority stake for firm, £4!

TAXPAYERS got a ‘rotten deal’ when a Canadian company took a majority stake in a crisis-hit engineering firm for £4, a Tory MSP claimed yesterday.

Economy Secretary Fiona Hyslop was yesterday challenged about why the Scottish Government spent £37million to become a minority shareholder in Burntisland Fabrications (BiFab) when owners DF Barnes took a majority stake by spending £4 on only four shares.

At Holyrood’s economy committee yesterday, Conservative MSP Graham Simpson said: ‘We, the Scottish taxpayer, get a minority stake in the company and not even a seat on the board, and the Canadian company for £4 gets a majority of the company. It seems to

‘Vast amount of money’

me a pretty rotten deal if the taxpayer is putting in the vast amount of money, y, £37million plus extra which takes it up to £52million, you get a minority stake.

‘The other side of the deal [is] £4 for 67 per cent share of the company. That is a rotten deal.’

Despite efforts to save it and £ 52million of public money, BiFab is now in administration.

The business, which has yards in Burntisland and Methil in Fife, and another on Lewis, was rescued by the Scottish Government in 2017 and bought by DF Barnes in 2018, with the Government ‘primary financiers’.

Ministers withdrew their financial support in October, scuppering a lucrative deal to build eight wind turbine jackets.

Miss Hyslop yesterday told MSPs there were concerns that the firm was ‘not in a position to have a future pipeline of activity and work’. She said that the Government had been ‘certainly prepared to provide that financial support had they been in a position to have that continuous pipeline’.

She added it had been ‘ very disappointing’ that BiFab did not win a recent contract for part of the Seagreen wind farm development.

Miss Hyslop said: ‘It’s the viability of the company that has led the board themselves to seek administration.’

On Mr Simpson’s criticism of the deal, Miss Hyslop said: ‘What we were bringing in was their expertise... that [they] could run the company, that we would not be directly involved in running the company.’

BiFab announced earlier this month that it was entering administration after ministers ruled out nationalising the firm, saying it would be unlawful under state aid rules to continue its financial support.

At the time, Miss Hylsop said the only alternatives were to let the company fail or for the Government to take it into state ownership, saying this was ‘something ministers did not want to do’.

Yesterday, she said that the Government, as a minority shareholder, had been ‘exhaustive’ in considering options to support BiFab.

She added: ‘We were trying to get them to get third-party investment, to try to find ways of improving their cashflow proposition.

‘Clearly we wanted that company to be successful under the ownership of DF Barnes.’