SeaFrance on the brink as cash runs out

Wednesday, 18 August 2010

Embattled cross-Channel ferry operator SeaFrance could run out of cash in the coming days unless the EC allows its shareholder, French state rail company SNCF, to inject emergency funds, writes Stuart Todd.

SeaFrance has spent almost all the €70 million (US$90m) of financial support allocated by SNCF in 2010, and an injection of emergency funds would cover running costs until 15 September, when a court hearing will examine a rescue plan.

“Our cash-flow has been boosted by peak season passenger activity, but it will be extremely difficult to hold out until the end of the month,” said a SeaFrance official.

“Hopefully, the EC will give its OK [to the funding] this week.”

One takeover bid had been received for SeaFrance by the time the deadline for offers closed on 31 July, after the operator had been placed into administration by a Paris commercial court.

The only bid received was from Being Bang, a French company based in the Paris suburbs, reportedly planning to acquire SeaFrance’s capital and assets for the symbolic price of €1.

Little is known about Being Bang, except that in 2005, it had expressed an interest in the privatisation of Marseilles-based, state-owned ferry operator SNCM.

More recently, it outlined plans to charter ferries in the Mediterranean and operate cruise-concert excursions.

The head of Being Bang, Laurent Barselo, has remained tight-lipped ahead of a meeting with SeaFrance’s two judicial administrators, scheduled to take place by the end of the month.

He has indicated that, in the event of hostility towards the bid – from SeaFrance staff and management, in particular – Being Bang could withdraw it.

The SeaFrance official added: “We know very little about Being Bang’s offer, other than it is set to be examined by the court on 15 September in competition with the recovery plan submitted by the management.”

The recovery plan makes provision for around 725 job cuts from the workforce of around 1,600.
Funding SeaFrance’s recovery and financing the redundancy programme will require a fresh injection of capital from SNCF of around €190 million, and is subject to EC approval.