German Chancellor Olaf Scholz has pledged federal support to rescue the financially troubled Meyer Werft shipyard in Papenburg, a key employer in the region.

The shipyard, which faces a financial crisis despite full order books, is deemed "system-relevant" for Germany's maritime industry.

Scholz's visit comes ahead of crucial state elections, highlighting the political significance of the move.

The federal government, along with the state of Lower Saxony, plans to temporarily nationalize the shipyard, injecting 400 million euros in equity and securing bank loans with guarantees.

This intervention aims to safeguard approximately 17,000 jobs linked to the shipyard.

While the plan awaits approval from the Bundestag and the EU Commission, it marks the largest state intervention in a company rescue in Lower Saxony's history.

The Meyer family will retain a stake and have a buyback option once the state exits in a few years.