SNCM to receive €800 million from France

Genoa - France wants to put in €800 million to save SNCM. According to the French satirical newspaper Le Canard Enchainé, the proposal appears in a report sent by the French Deposits and Consignments Fund (CDC) and the bank BPI to Minister of Transportation, Frédéric Cuvillier. The idea to overcome potential EU penalties for the use of state aid is to finance the birth of a publicly owned company that will acquire new ships to be rented to the company. The minister confirmed the existence of the report, but added that it did not contain the information published in the press, in particular the proposal of a subsidy which must be returned to the autonomous region of Corsica. The document, according to the revelations, excludes the involvement of an outside investor “because of the advanced state of the company’s decline.” The acquisition of SNCM by Norwegian company Siem was also ruled out. Siem had been negotiating for this possibility for more than a year. The exclusion of Siem demolishes what seemed to be the most promising direction for the future of the company, although determined by the dispute with the European Union. According to press leaks, Siem even prepared a plan for the acquisition of seven new ships, compared to the four called for by the company’s business plan. In fact, the Norwegians were not only interested in developing the France-Corsica route, which SNCM traditionally plied, but also other Mediterranean routes.

According to the Deposits and Consignments Fund (CDC) report, there is only one option that remains, which is public aid. The danger is that the issue will become a conflictive social problem. The company has 2,500 employees, mainly located in Marseille. The plan presented by CDC and BPI, with the advice of the Linklater legal office, contemplates the establishment of a local publicly owned company and a mixed-ownership company with the Region of Corsica which would acquire the ships in order to rent them to SNCM at favourable rates. The French State, for its part, would provide a subsidy to the Region. This last detail has been explicitly denied by the ministry. It is a plan that requires clarification on many points. SNCM is already in the European Commission’s sights because of this question of state aid. Brussels has asked the company to return €440 million. The first €220 million were given by the French state at the time of privatization, at the end of the 1990s. A further €220 million was subsequently provided by the Region of Corsica itself, as compensation for the provision of a public service guaranteeing the principle of territorial continuity. The objections from Europe have created problems for the plan that France was offering to save the company from its own financial difficulties. Currently the company is 66% owned by Transdev, which is in turn half owned by the Veolia group and CDC.

CDC also has a further 25% direct ownership stake, while the remaining 9% is owned by the company’s employees. According to the plan, Veolia was supposed to sell its stake in Transdev at the end of 2013 and acquire the controlling stake in SNCM directly. But the €440 million penalty put paid to the deal, which is why Veolia now wants to sell its stake. In the last few months it has even tried to bring the company to court over its accounts. Marc Dufour, the president of the company, has fought this attempt with the support of a supervisory board in which Transdev has a minority presence. For this reason, Veolia recently tried to call a shareholder’s meeting to nominate a new board, but the attempt was unsuccessful. Now a report that was leaked to the French press has emerged, against which the CFE-CGC labour union has already spoken out, stating that “this report doesn’t match what the government announced in January, because it doesn’t match SNCM’s business plan or long term goals.”