SNCF approves ?170m aid for SeaFrance
The fate of loss-making French Dover Strait ferry operator SeaFrance has been placed in the hands of the European Commission following the decision of its parent company, French rail operator SNCF, to grant it ?170m ($227m) in fresh financing.
SNCF is to grant the struggling company ?100m in fresh capital and a further ?70m in the form of a loan for which SeaFrance has pledged two ships as security.
The total ?170m package was approved by SNCF on Wednesday and by SeaFrance"s employee consultative committee on Thursday, but cannot be implemented until it has received the approval of the commission.
SeaFrance said today that it had already submitted the package to the commission for examination but was unable to say when the commission"s decision might be forthcoming.
?We hope it will be in the next few weeks,? said a spokeswoman, who acknowledged that the operation could raise competition issues leading to the imposition of compensatory measures by the commission.
The company is preparing new measures in the meantime to ensure it is able to continue in activity while it is waiting for the commission"s decision.
It has an agreement with SNCF which enables it to cover its cash requirements on a month-by-month basis until February 2011 but SNCF has imposed a limit on the amount of money it is ready to make available under this arrangement.
SeaFrance said that additional measures would need to be taken in the event that this limit was reached and that these would be discussed shortly by its board.
Last year, the company ran up an operating loss of ?36m and a net loss of ?52m after seeing its turnover fall 20% to ?177m.
In the meantime, the company is proceeding with plans to axe 482 jobs among its 1,580 employees in accordance with the agreement reached with the unions representing its personnel before Christmas.
It said that it had currently received 250 requests for voluntary redundancy terms, which would be supplemented by retirements, training leave, switches to part-time working and transfers to SNCF.
But it warned that it would be unable to reach its target through voluntary departures and that 180-200 dismissals looked likely to be necessary from June.
SNCF officially offered more than 400 job opportunities but union representatives have claimed that this offer was ?hot air?. Many employees have indicated that they are unwilling to leave northern France, while others who have applied for work with SNCF have had their applications rejected.