Third Damen Mangalia Auction Draws No Bidders Again

A third  auction for the sale of the Damen Mangalia Shipyard has ended without a single bidder, prolonging uncertainty over the future of one of Romania’s strategically important industrial assets.   According to Transylvania Insolvency House (CITR), the judicial administrator overseeing the shipyard, another auction is scheduled for September at the same asking price, regardless of whether the court decides to maintain or change the current sale procedure.    Despite the repeated lack of interest, CITR General Manager Paul Dieter Cirlanaru remains optimistic that a solution could be found by the end of the year. “I believe we will have a solution by the end of the year,” Cirlanaru said. Shipyard valued at €184 million   An assessment commissioned by CITR puts the shipyard’s market value at approximately €184.05 million, while its liquidation value is estimated at around €84.15 million.   The sale process has become effectively blocked because creditors initially refused to approve a strategy involving progressively reduced auction prices down to the liquidation value.   The majority creditor, Damen Netherlands, subsequently proposed and approved a series of six monthly  auctions at the full market value of €184 million. As a result, despite three consecutive auctions attracting no potential buyers, the starting price has not been reduced.Under the current strategy approved by the creditors’ meeting, the next auction must also start at €184 million.   CITR has asked the court to allow the shipyard to be sold under the Romanian Civil Procedure Code instead of following the strategy approved by the creditors. If the request is approved, the sale process could move more quickly through successive price reductions, starting at 100% of the market value and moving to 75% and 50%.   Cirlanaru said the auctions could potentially be organized at intervals of one or two weeks, significantly accelerating the process.    The sale would remain a public auction rather than a direct negotiation. If no buyer emerges even at 50% of the market value, the procedure could eventually establish a lower minimum threshold, potentially around 25-30%, although the CITR executive described this as an extreme scenario. The court is expected to consider the requested change to the sale procedure in September.   One of the companies that has expressed interest in the Mangalia shipyard is German defense manufacturer Rheinmetall, which announced in May that it was considering acquiring the facility in cooperation with Swiss shipping giant MSC.   Rheinmetall said at the time that the two companies were examining substantial investments aimed at transforming the shipyard into a dual-use hub for both military and civilian shipbuilding. However, Rheinmetall did not participate in the first auctions.Asked why the company had not registered for the June 29 auction and whether it planned to participate in a subsequent one, Rheinmetall said it did not comment on ongoing commercial matters.   Romanian Economy Minister Irineu Darau previously said Rheinmetall had officially indicated during technical assessments that the total size of the Mangalia assets exceeded the German company’s current requirements, which are focused primarily on military production.    According to Darau, Rheinmetall therefore considered participating through a consortium with MSC, which could take over and operate the shipyard’s commercial and civilian component.   The Romanian Ministry of Economy, Digitalization, Entrepreneurship and Tourism is the majority shareholder of 2 Mai Mangalia Shipyard, which in turn owns a 51% stake in Damen Mangalia.   Darau stressed that, legally, decision-making powers over Damen Mangalia currently belong to CITR and Damen, which directly and through affiliated companies controls approximately 97% of the declared claims in the insolvency proceedings.   The minister said the Romanian state cannot directly intervene in the ongoing bankruptcy procedure, as the management, preservation and sale of the assets are under the responsibility of the judicial administrator and the supervision of the insolvency judge.   At the same time, he emphasized that the shipyard’s industrial assets remain strategically important for Romania and that the ministry has maintained dialogue with potential industrial investors.   The future of the shipyard is also connected to European defense financing. Darau said Romania had conditioned €920 million in SAFE funding intended for Rheinmetall on concrete investment and construction at Mangalia. However, he stressed that the state cannot control the bankruptcy process on a daily or weekly basis. The minister said the government must take into account the existing international dispute, the shipyard’s bankruptcy and the rights of the creditors, while also identifying the legal instruments available to support a potential investment. CITR remains optimisticDespite the failure of three consecutive auctions, CITR believes the situation could be resolved before the end of 2026.    Cirlanaru said he has noticed increased government attention to the issue, although the shareholder dispute and the complex legal framework have made the process difficult.   The outcome of the court’s decision in September could therefore prove crucial. A shift toward a faster  auction process with progressively lower prices could make the shipyard more attractive to potential investors and determine whether a buyer can ultimately be found.