Sea Containers to Quit Ferry Business

Monday, March 27, 2006
Sea Containers Ltd. said it would withdraw from the ferry business, and it now expects to take $500 million in charges for the fourth quarter, sending its shares down 9 percent. The company, which runs the SeaStreak commuter service linking New Jersey with New York City, said the charges would reduce its net worth by $475 million, making it unable to comply with certain bank borrowing agreements. The passenger transport and marine container leasing company said in a statement that its board had decided to exit the ferry business, resulting in a noncash impairment charge of $415 million on a pretax basis for the fourth quarter. The company had previously estimated that it would take a fourth-quarter charge of $112 million. Sea Containers will also take a noncash pretax charge of $85 million for losses incurred during the sale of containers, impairment charges and a goodwill write-down. The company said it was holding talks with lenders on obtaining waivers or amendments to loan agreements and would restate its earnings for all four quarters of 2005 and delay filing its annual reports with the U.S. Securities and Exchange Commission until April to allow time to finalize bank negotiations and outstanding accounting issues. (Source: Reuters)

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