French Ferry Firm Loses State Aid Appeal

Posted by Michelle Howard
Thursday, September 04, 2014
Photo: SNCM

Cash-strapped ferry operator SNCM looks set to seek legal protection from its creditors after Europe's highest court ruled on Thursday it must pay back 220 million euros ($289 million) of French state aid.


SNCM, owned 66 percent by transport group Transdev, has racked up losses as low-cost competitors have eaten away its market share and is fast running out of funds.

Transdev - itself a joint venture between water and waste firm Veolia and French state bank CDC - has said it will not put more money into SNCM and that court protection from creditors is the only way to shield the ferry operator from two separate state aid repayment claims totalling 440 million euros.

SNCM received part of the aid during its privatisation in 2006, and got European Commission approval for it at the time.

However, in 2012 the EU Court of Justice's (ECJ) first-level General Court ordered it to repay 220 million euros following a complaint by competitor Corsica Ferries.

Rejecting an appeal by the French government, the court said in a statement on Thursday that the French state, when giving various forms of financial aid to the firm, had not acted in the way a private investor would have in similar circumstances and that the European Commission had been wrong to approve the aid package.

A court official told Reuters that EU antitrust authorities would now monitor whether SNCM repays the state aid and possibly start new legal action to enforce the ruling, a process that could take months or even years.

The firm's unions have called on the government to keep the company afloat.

"We still expect from France and the government that SNCM's rights are defended with a long-term perspective and that they go to the end of all appeal procedures," CGC union leader Maurice Perrin said.

SNCM, which employs about 2,600 people, has a second state-aid repayment claim - which it is also appealing - hanging over it, relating to aid given in the 2007-2013 period.

Veolia has long said the only way to protect SNCM from the claims is to put it under Chapter 11-style court protection from its creditors and continue the viable part of the business under a new legal structure, with new shareholders and with part of the company's staff and assets.

The French state, which owns a direct 25 percent stake in SNCM besides its indirect stake via CDC, came round to this view in July, but has promised the unions not to seek court protection before the end of October.

Experts say court protection is the most likely outcome and even an ECJ ruling in favour of SNCM would not have changed that as the firm is likely to run out of cash long before any of the court procedures reach their conclusion.

Transdev's efforts to find a buyer have foundered as prospective buyers - which included Norway's Siem Shipping and Mexico's Baja Ferries - wanted guarantees that they would not become liable to repay the aid, which its shareholders cannot give.

The long-running SNCM crisis has stopped Veolia from selling part of its Transdev stake to CDC, as the state bank does not want to take over majority control of Transdev as long as it owns the troubled ferry operator, whose unions have launched several strike actions in the last few years.

(1 US dollar = 0.7606 euro)

(By Geert De Clercq, Additional reporting by Jean-Francois Rosnoblet in Marseille; Editing by David Clarke and Elaine Hardcastle)

Maritime Reporter March 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Obangame Express 2015 Concludes in the Gulf of Guinea

Maritime forces from Gulf of Guinea nations, Europe, South America, and the United States and several regional and international organizations concluded the multinational maritime exercise,

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

Legal

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

US Navy to Roll out Underwater Spy Satellites

The robotic series that remade crusade in skies will shortly extend to a low sea, with underwater view “satellites,” drone-launching pods on a sea building and unmanned ships sport submarines,

Finance

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

India May Add Japanese Soryu-Class Submarines to its Fleet

India is reportedly considering a project to incorporate six Japanese Soryu-class diesel-electric submarines into its fleet, says The Japan Times.   The Defense

News

Gulf Bridge Express Service to End

The Gulf Bridge Express Service will shortly be terminated with the last roundtrip voyage being MV Saint Nikolaos voyage 00008S, ETA New Orleans on April 22, 2015.

Obangame Express 2015 Concludes in the Gulf of Guinea

Maritime forces from Gulf of Guinea nations, Europe, South America, and the United States and several regional and international organizations concluded the multinational maritime exercise,

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Government Update

Obangame Express 2015 Concludes in the Gulf of Guinea

Maritime forces from Gulf of Guinea nations, Europe, South America, and the United States and several regional and international organizations concluded the multinational maritime exercise,

Greece Will Sell Piraeus Port Stake in Weeks

The Greek government will sell its majority stake in the port of Piraeus within weeks, the country's deputy prime minister told China's official Xinhua news agency,

China Maritime Silk Road to Touch India for Namesake

Chinese officials on Saturday fleshed out some details for the country's ambitious 21st Century Maritime Silk Road (MSR) project in its “one belt, one road,” action plan.

Ferries

Scandlines Ferry Back in Service by End June

The damaged Scandlines ferry M/V Prinsesse Benedikte is being repaired at the Polish shipyard Remontowa and is expected to be ready before the end of June 2015.

Washington State Ferry Tacoma Returns to Service

Washington State Ferry M/V Tacoma will return to work on the Seattle/Bainbridge Island route starting March 28 after suffering electrical damage last summer.   The

Greek Ferry Still Stuck

The Greek ferry that ran aground just outside of port on the Aegean Island of Kassos Wednesday night is still stuck. The 227 passengers and 55 crew aboard the

 
 
Maritime Contracts Maritime Security Navigation Pod Propulsion Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2378 sec (4 req/sec)