The liquidator of collapsed cross-Channel operator SeaFrance has estimated its debts at €190 million (US$250 million), most of which is owed to its parent, French state railway company SNCF.
The liquidation of the ferry company and the loss of 1850 jobs have sparked a flurry of activity on the cross-Channel market. A Paris commercial court ordered the liquidation on January 9. The Dover-Calais operator had been in receivership since June 2010, and despite bids by the seamen’s union French Democratic Confederation of Labour (CFDT) and a joint offer by DFDS and LD Lines at the end of last year, the company could not be saved, leaving a vacuum for new operators to fill.
One of those new operators could be through rival short-sea competitor Eurotunnel. It wasted little time in flagging its intention to put in offers for some of the redundant SeaFrance vessels. Chief Executive Jacques Gounon told a French newspaper that Eurotunnel could be the majority partner in a venture operating a ferry service between Calais and Dover in partnership with a co-operative of former SeaFrance workers.
Danish firm DFDS, which operates between Dover and Dunkirk, has also expanded its services to Calais in a joint venture with western Channel operator LD Lines. They will operate under the French flag and will create 300 jobs, mostly in France. DFDS said: “It’s a logical step for us to expand in the market. We’ve expressed an interest all along to do so when you consider our offer for SeaFrance last year.”
In reality, there is already plenty of surplus capacity, particularly with the recent introduction of P&O’s Spirit of France alongside the Spirit of Britain.
Meanwhile, what of the ships and the staff? Liquidator Stéphane Gorrias said the first priority was to “safeguard the rights” of SeaFrance’s personnel. SNCF has made a commitment to offer jobs to 500 workers.
Next is the evaluation and sale of SeaFrance’s assets, in particular its fleet. It owns three vessels: the SeaFrance Nord Pas-de-Calais, a freight ship with an estimated value of €9-€10 million; and the ferries SeaFrance Berlioz and SeaFrance Rodin, worth between €50 and €70 million each. A fourth ship, SeaFrance Moliere, had been operated on lease-back.
The proceeds would still fall well short of SeaFrance’s debts of €190 million. And the company’s liabilities will have increased with salaries due to redundant workers having to be paid through an independent wage guarantee fund that, ultimately, will have to be reimbursed.
The final stage in the liquidation process will see creditors being paid – Gorrias stressed that the French state and taxpayers should not have to contribute to the bill. Although SNCF is state-owned, and has already put in a claim for the €170 million it is owed, it has to operate like a private firm and must legally bear any losses without state aid.
The liquidator said he was determined to seek out who was responsible for SeaFrance’s ruin. For this he will not have to look beyond the powerful CFDT seamen’s union and an ineffective management constantly at odds with its strike-happy workforce.
The purchase of the SeaFrance Moliere, a fuel thirsty “SuperFast” vessel similar to Australia’s Spirit of Tasmania, was a rash move at a time when the company was already struggling, probably engineered by accountants in Paris – she was in essence transferred from one state-owned concern to another. The ship, a narrow-beamed, conventional fast ferry designed for overnight passages, was totally unsuited for the 35-kilmetre Dover Strait crossing.
To think that not so long ago SeaFrance was operating a six-ship service on this, the busiest of ferry routes. The replacement of earlier-generation ships with the magnificent newbuilds SeaFrance Rodin and SeaFrance Berlioz simply came too late. This, coupled with overmanning, was always going to lead to disaster and now for the first time, the Dover Strait is without a French operator.
- In 2005, SeaFrance made a €9.27 million loss, but it made a net profit of €7.9 million in 2006. In 2008, the company lost €20 million and since October 2008 has been losing in the region of €3 million a month.
- In February 2009, SeaFrance announced a restructuring following a decline in freight carryings and significant losses. The plan would see up to 650 jobs lost in France and the withdrawal of the SeaFrance Cézanne, SeaFrance Nord Pas-de-Calais and the SeaFrance Renoir. A previous restructuring plan by SeaFrance submitted in January 2009 was rejected by owners SNCF.
- Following the restructuring, LD Lines indicated an interested in taking over SeaFrance. In March 2009, Brittany Ferries announced it had also made an offer. The Brittany bid involved the creation of a new holding company in which it would have a 75 percent stake with the remainder owned by SNCF.
- In September 2010, the CFDT rejected a plan for 400 redundancies.
- On November 15, 2011, the company suspended operations for 48 hours pending a court hearing the following day.
- At the November 16 hearing, the commercial court ordered the liquidation of SeaFrance, but allowed the operator to continue trading until January 28, 2012. However, actual ferry operations were shut down, with administrators claiming that the safety of vessels, staff and property could not be guaranteed.
Rabaul Shipping Company in the news again
The safety record of Papua New Guinea’s Rabaul Shipping Company has taken another hit with the loss of the Rabaul Queen. The 22-year-old Japanese-built vessel went down on February 2 near the end of its 20-hour passage between Kimbe on the island of New Britain and PNG’s second-largest city Lae.
Of about 360 people on board, 246 were rescued, leaving more than 100 people, mostly tertiary students, believed drowned. PNG’s Maritime Safety Authority says the ship had an official limit of 310 people.
Various local news reports suggested the ferry began its journey despite warnings of rough weather. In a report carried by the Post-Courier newspaper, PNG’s national weather service chief Sam Maiha said companies had been warned to keep ships moored because of high winds.
Rabaul Shipping has had some difficulties in the past with their ships. One vessel caught fire in port in 2006 and another sank, though with no loss of life. PNG’s government has promised an investigation to determine the cause of the latest sinking.