EC rejects SeaFrance re-structuring plan
The European Commission has rejected the re-capitalisation plan submitted by the French authorities for SeaFrance, Ifw-net reports.
Attention now turns to a Paris commercial court hearing today, where SeaFrance’s fate will be decided.
Three takeover bids are on the table for the SNCF-owned company: from DFDS and LDA, Being Bang and a co-operative of SeaFrance workers.
The commission said in a statement that France “had not been able to demonstrate that SeaFrance’s contribution to the plan was exempt of state aid and reflected the confidence of the markets in its viable future”.
SeaFrance had suffered recurrent financial difficulties since 1996 and had been in administration since June 2010.
In the statement, Competition Commissioner Joaquin Almunia said: “The case presented by the French authorities is, unfortunately, not enough to erase the doubts that exist about SeaFrance’s contribution to the restructuring plan.”
Earlier this year, a recapitalisation plan submitted by the French authorities to the commission made provision for SNCF to inject fresh capital of €223 million to put SeaFrance on an even keel by 2016.
But EC investigators expressed doubts on the viability of SeaFrance’s restructuring measures and its financial contribution to them and the plan was modified.
One of the key changes was the proposed sale of ferry Nord Pas de Calais (pictured) to reduce SeaFrance’s share of the Calais-Dover freight market and help allay EC fears over the distortion of competiton on the route.
SeaFrance argued that the proceeds from the sale, with a loan from SNCF of almost €100 million, would provide scope for the company to contribute 40-50% to its recapitalisation, as recommended by the EC. As a result, direct cash aid from SNCF would be reduced to between €160 million and €170 million.
However, the commission has reservations about the loan to SeaFrance, even though it would be offered at market rates, considering it to be state aid – SNCF being a public corporation.
Attention now turns to a Paris commercial court hearing today, where SeaFrance’s fate will be decided.
Three takeover bids are on the table for the SNCF-owned company: from DFDS and LDA, Being Bang and a co-operative of SeaFrance workers.
The commission said in a statement that France “had not been able to demonstrate that SeaFrance’s contribution to the plan was exempt of state aid and reflected the confidence of the markets in its viable future”.
SeaFrance had suffered recurrent financial difficulties since 1996 and had been in administration since June 2010.
In the statement, Competition Commissioner Joaquin Almunia said: “The case presented by the French authorities is, unfortunately, not enough to erase the doubts that exist about SeaFrance’s contribution to the restructuring plan.”
Earlier this year, a recapitalisation plan submitted by the French authorities to the commission made provision for SNCF to inject fresh capital of €223 million to put SeaFrance on an even keel by 2016.
But EC investigators expressed doubts on the viability of SeaFrance’s restructuring measures and its financial contribution to them and the plan was modified.
One of the key changes was the proposed sale of ferry Nord Pas de Calais (pictured) to reduce SeaFrance’s share of the Calais-Dover freight market and help allay EC fears over the distortion of competiton on the route.
SeaFrance argued that the proceeds from the sale, with a loan from SNCF of almost €100 million, would provide scope for the company to contribute 40-50% to its recapitalisation, as recommended by the EC. As a result, direct cash aid from SNCF would be reduced to between €160 million and €170 million.
However, the commission has reservations about the loan to SeaFrance, even though it would be offered at market rates, considering it to be state aid – SNCF being a public corporation.