Debts leads SNCM to bankruptcy

Genoa - Burdened with debts of more than half a billion Euros and a strong liquidity crisis, the French shipping company SNCM decided yesterday to file for court protection from insolvency. It will do so by next Wednesday. This is a decisive step towards a possible sale, in which Italian companies could also be involved: Moby and GNV. The current majority shareholder Transdev (Veolia group) announced the decision yesterday afternoon to trade unions, at the end of a troubled board of directors meeting. It should have started early in the morning, but it was stopped by a large group of workers who entered the company’s headquarters in Marseilles, asking for clarification on what the president of SNCM, Olivier Diehl is going to decide. The board meeting finally resumed in the early afternoon, however the conclusion was as predicted by Transdev at the end of last week. The deposit must be made by next Wednesday. Transdev will ask for the return of 103 million in loans it had granted to SNCM, but it is not able to return.

Pierre de Maupoint Vandeul, union representative of the company’s managers, stated: “Management recognizes that the there’s a thin line between court protection and liquidation.” It is a solution which was actually mentioned almost a year ago, when the former chairman of the board of directors, Marc Dufour opposed the majority shareholder. Meanwhile, during the spring and summer, Transdev has taken steps to put their own trusted men at the top of the company, as the president Diehl, Director-General, Guillaume de Feydau, the chief operating officer, Gianfranco Tantardini, the human resources manager, Philippe Dabas, and the communications manager, Gregoire Biasini, who yesterday did not respond to requests for information. With this new team, the process of filing for court protection has proceeded more quickly, in spite of a tough 17-day strike in July. SNCM is the owner, along with the La Meridionale company, of the public service route between Corsica and France.

If the company goes under court protection, there are two possibilities for the future of the two thousand workers. The first is liquidation and the second a rescue plan that will probably reduce of the number of staff by half and that could end with the sale of Transdev’s share to another French or foreign operator. Italian bidders will certainly participate in the eventual tender. However, there’s still the issue of the €440 million that the company received as state aid and now must return to the French State and the Autonomous Region of Corsica, since it was in violation of EU competition regulations. This debt has so far deterred the successful sale of SNCM. Beyond the financial situation, according to the unions, a great portion of responsibility for the failure of SNCM lies with the French state; as a minority shareholder, it could have at least tried to play its proper part in this. It is suspected that it wanted to bring the company to liquidation, thereby decreasing competition for private companies such as Corsica Ferries, which is interested in taking over a big portion of the routes between France and Corsica.