German submarine and ship builder, Thyssenkrupp Marine Systems, has said that it has agreed to buy the Asian-owned MV Werften shipyard on Germany’s Baltic coast which filed for bankruptcy at the start of the year.

The German company, TKMS, said in a statement that the two sides had agreed confidentiality on the purchase price.

MV Werften ran into dire straits after the Covid-19 pandemic hit demand for cruise ships, putting thousands of jobs at risk and dealing a blow to the local economy.

TKMS said the takeover of MV Werften would give “one of the most tradition-rich shipyards in Germany a long-term perspective” for its operations.

It said it expected to produce submarines at the facility from 2024 if the German government ordered further vessels “and the resulting investment in the upgrading of the shipyard”.

The German government has announced plans for a massive increase in military spending in the wake of the war in Ukraine, which could lead to a boost in orders at MV Werften.