Eurotunnel unhappy with continued SeaFrance decision delays
December 28, 2011
Eurotunnel’s Chairman and CEO Jacques Gounon has hit out at what he describes as the “total confusion” surrounding the fate of SeaFrance.
This follows a Paris commercial court’s ruling to postpone its decision on the SeaFrance takeover bid, submitted by a co-operative of the ailing cross-Channel ferry operator’s workers, until 3 January.
The co-operative was the sole bidder, since DFDS and LDA (via its subsidiary, LD Lines) decided against submitting a new bid for SeaFrance earlier in December.
In a letter to shareholders, Gounon said: “No viable offer was received by the Paris commercial court within the timescale provided despite all the best efforts of French national and local public authorities and elected representatives from all parties.”
He argued that despite the recommendation on 19 December by the receiver that the business should cease, the court proposed instead that the buy-out plan be considered on 3 January.
“The arithmetic is quite straightforward: SeaFrance, set to lose €230 million in 2011, was ordered by the European Commission to repay €70 million of illegal state aid. The ships are worth €225 million, with the Berlioz alone being purchased in 2005 for €98 million.
“There are only two ways to look at it: either the buy-out offer is low, and a new form of disguised state aid is involved, or it is substantial and the return on investment is problematic."
Gounon also hit out at suggestions that Eurotunnel could have played a part in the demise of its competitor.
“Don’t let anyone suggest that we are somehow responsible for SeaFrance’s collapse when it is quite easy to see what has happened. The union that put forward the buy-out proposal explained that the unit price for each crossing would need to increase by €50 for SeaFrance to break even.”
This provided an idea of the price war which had raged on the Dover Straits and consequently the likelihood of future price increases, he added.
“Even if we allow for very slow growth in Western Europe, our market share strategy and pricing policy are confirmed as the tools which enable us to be profitable,” he insisted.
Courtesy of IFW
