Monday, June 8, 2015

Eurotunnel Agrees Sale of RoRo Ferry Assets to Freight and Passenger Group

Doubt Over MyFerryLink Service as SeaFrance Vessels Sold Off
Shipping News Feature

UK – FRANCE – The end it seems has finally come for MyFerryLink, the cross channel waterborne link owned by Groupe Eurotunnel. A formal announcement has made clear that the negotiations we had previously speculated upon between the owners of the Calais – Dover service and Danish headquartered freight and passenger shipping group DFDS have reached a successful conclusion and Eurotunnel holds a binding offer from DFDS for a let to buy sale of the former SeaFrance ferries, Rodin and Berlioz.

In the statement the Eurotunnel Group says it believes that the constructive manner in which DFDS conducted itself during the recruitment of ex SeaFrance personnel in 2012 gives hope for the best solution possible with regard to preserving employment without interruption to services. No mention is made of the efforts DFDS originally made in supporting the regulators efforts to stifle MyFerryLink services after its own bid for the assets, in cooperation with LD Lines, proved insufficient.

Eurotunnel says it regrets that the staff, in the form of the SCOP ex SeaFrance employee operation has not had the support it needed to be able to present a takeover proposal, something hardly surprising given the often stormy labour relations between the workers and SeaFrance. It also points out that this sale ensures that the activity remains in Calais, a situation which was not achieved when the SeaFrance Moliere was sold by its owner, Le Credit Lyonnais, to be operated in the Irish Sea.

The entire case has been mired in controversy from the beginning. The UK Competition Commission (UKCC) decided the original purchase was anti-competitive and ordered the vessels sold, whilst the French Commercial Court accepted the deal with a proviso that the assets of SeaFrance, i.e. the ferries, must not be sold by Eurotunnel until 2017 at the earliest.

One other factor which has arisen from this whole debacle is the question of what actually constitutes a merger? As the UKCC morphed into the Competition and Marketing Authority (CMA) in April 2014 the original decision from the UKCC was overturned by the Competition Appeal Tribunal (CAT) which decided the acquisition of the SeaFrance assets might not constitute a merger and therefore not be under UKCC (or presumably CMA) jurisdiction. Eurotunnel says in its statement that the CMA should not oppose the completion of this latest sale ‘which will lead to two maritime operators of equal importance’.

This of course is somewhat speculative, speaking today to the Handy Shipping Guide the CMA confirmed that any significant merger requires observation by some arm of the competition authorities and it will not make any prejudgement without carefully studying the whole matter. What may be the deciding factor in who takes any action, should it be required, will probably be according to where the new managing company is based, how and where they declare their corporate revenues etc. The final paragraph of the Eurotunnel statement says, somewhat hopefully:

“With regard to the Nord Pas de Calais, the Eurotunnel Group, in order to maintain its transport operations, will ask the competition authorities to lift the current prohibition and to enable it to be operated in coordination with the Fixed Link. The Eurotunnel Group, after having supported this activity for three years, hopes that all those involved will support MyFerryLink in a responsible manner through this transition which has been imposed upon it.”

This last not only hints at some sort of arrangement between old and new owners to swap vehicles and passengers between over and sub sea operations as circumstances require (storms, train breakdowns etc.) as was the case with MyFerryLink/Eurotunnel, but would seem to be aimed at SCOP, as the fate of the 370 on board and 106 land based staff who form that organisation, and are basically the old SeaFrance labour force, remains very much in the balance.

Photo: The 2001 built RoPax ferry Rodin, formerly the SeaFrance Rodin, may soon be wearing her third set of livery.