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Friday, October 28, 2016

Struggling SNCM Ferry Operator to Order 4 Ships

March 7, 2014

Photo: SNCM

Photo: SNCM

Reuters - Loss-making France-Corsica ferry operator SNCM, which is partly owned by French water and waste group Veolia Environnement, plans to order four new ships, an SNCM spokesman said on Friday.

The spokesman said the board had approved deals for four new ferries, two of them firm orders and two of them purchase options, to renew the fleet as part of a restructuring plan for the firm.

He did not provide details on the vote or explain how the ferry operator plans to finance the purchases, with each ship estimated to cost 150 million to 170 million euros.

Last year, the European Commission ordered France to recover 440 million euros ($610 million) in state aid from the long struggling ferry operator, which has threatened the survival of a business the government is eager to rescue.

France has appealed the order.

Veolia, the company's main private shareholder, has said it will not put new money into SNCM and will not be held liable for repaying the subsidies.

SNCM is 66 percent-owned by Transdev, a public transport joint venture between Veolia Environnement and state-backed bank Caisse des Depots (CDC), while the state owns 25 percent and its employees 9 percent.

A Transdev spokeswoman refused to say how Transdev's members on the SNCM board had voted. Veolia declined comment.

A source familiar with the situation said that for the board to approve the acquisition, the representatives of the state, the staff and the CDC would all have had to vote in favour.

At a Feb. 25 SNCM board meeting, in which government representatives abstained as they waited for additional information, Transdev had opposed the ordering of the four ships.

"Transdev and Veolia will not support any further financing of SNCM, because the restructuring plan is not viewed as credible," Veolia said in a statement last week.

Veolia added that it was ready to divest its 66 percent stake in SNCM for a symbolic price and abandon its claims on SNCM in order to facilitate its recovery.

($1 = 0.7214 euros)

(Reporting by Jean-François Rosnoblet in Marseille and Geert De Clercq in Paris; editing by Jane Baird)

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