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Tag: State Aid | Ferry Shipping News

Mar 01
1

State aid: the EU General Court dismisses the actions regarding the financing of the Fehmarn Belt fixed link project between Denmark and Germany

By | 2024 Newsletter week 09 | No Comments

Unfortunately, Scandlines failed in its attempt to challenge the state funding for the rail and road tunnel connecting Denmark and Germany. The second-highest court in Europe sided with EU competition regulators who had endorsed the financial assistance.

“According to the General Court, the Commission was entitled to find that the Fixed Link project is of common European interest, inter alia because that project makes a significant and concrete contribution to the achievement of the European Union’s transport policy objectives and broader EU objectives, and that it will improve the connection between the Nordic countries and central Europe.”

Read the full text here.

Photo: Femern

Jun 11
0

Grimaldi Formally Opposed State Aid To Ferry Companies In Italy And Finland

By | 2020 Newsletter week 24 | No Comments

Emanuele Grimaldi, CEO of Grimaldi Group, exclusively announced to Ferry Shipping News that his company has formally opposed the financial measures decided in Italy and in Finland to support some ferry competitors.

“We have formally contested, both on the local market and in Europe, those measures aimed at giving financial support specifically to some companies and which is selective, discriminatory and capable of distorting competition” Grimaldi said.

Legal actions have been promoted and addressed to Rome and Bruxelles for the EUR 72 million public subsidies extended by the Italian government to Compagnia Italiana di Navigazione (part of Onorato Armatori and operating Tirrenia’s fleet and routes) until 18 July 2021.

A similar action was taken in Finland against the National Emergency Supply Agency which “has already granted financial support to four out of seven commercial operators securing the main maritime bridges for rubber-tired vehicles. Finnlines has also filed an application under this same emergency financial support programme but up to know we did not receive any public aid”. For this reason, Grimaldi sent a letter to the European Union Directorate-General for Competition accusing Finland’s government of providing selective assistance to five ferry operators that compete with Finnlines.

In an interview published in the Wall Street Journal, the Italian owner further added: “Those who are not strong enough to survive should be incorporated by those who are strong. That’s the way it should work, but with the pandemic, it’s not. I’ve never seen so much state interference in shipping,” Grimaldi concluded.

Apr 16
0

FERRY SHIPPING

By | 2020 Newsletter week 16 | No Comments

Mr Grimaldi Opposing Unfair State Aid to Troubled Ferry Companies

Emanuele Grimaldi, CEO of Grimaldi Group, said in an interview published by Lloyd’s List that he is not opposed to state intervention in such difficult times, but stresses that any financial aid has to be provided in accordance with existing rules, and that individual companies should not be singled out for support at the expense of more robust rivals.

The Italian shipowner is afraid that public funding of ferry companies may distort competition by “bailing out weak shipping lines at the expense of those operating in the same trades that are well capitalized” is written in the article. Otherwise, he may consider lodging antitrust complaints on behalf of operators that are not included in any financial support packages.

 

Grimaldi also stated that his group of companies (Finnlines, Minoan Lines, Malta Motorways of the Sea, Atlantic Container Line, Grimaldi Euromed and Grimaldi Deep Sea) did not ask for assistance from any national government.

He estimates that Grimaldi Group revenue could be down by as much as 15%, equivalent to some EUR 500 million in the coming months, but notes that this downturn will be offset by much cheaper fuel costs. With no debt on 57 of its 120 ships, very low financing costs, and healthy profit margins for many years of between 5% and 10%, “we have never been in such a strong position to weather this storm” he concluded.

Mar 06
0

Standstill Agreement between Moby and Creditors Expired: What Now?

By | 2020 Newsletter week 10 | No Comments

The standstill agreement (with a with a group of bondholders under the €300 million bond due 2023 issued by Onorato Armatori Spa) announced one month ago by Moby, expired on 28 February.

The Milan-based ferry company also said to be engaged in discussions with the banks (Unicredit, Intesa Sanpaolo, Ubi, Banco Bpm and Mps) under the €260 million loan regarding a potential restructuring transaction.

On 2 March, a statement from the ferry company informed that

“Moby and its shareholders have received a proposal from the Ad Hoc Group of bondholders that

  1. is incompatible with the applicable laws of the underlying finance documents,
  2. incompatible with existing operational contracts, and
  3. excessively penalising creditors outside the Ad Hoc Group.”

“The desire of the Onorato Group and the shareholders of Moby is to satisfy all of the outstanding creditors and not to prioritise one subset of creditors. The Company is working with its advisers to find legal solutions that protect the interests of all stakeholders”.

Last week, an invitation was formally sent by the Company to all members of the Ad Hoc Group requesting further negotiations with their advisers regarding a potential restructuring solution.

“The Onorato family, always respectful of the needs of its creditors as well as the implementation of its business plan, has repeatedly reiterated the full availability of the Onorato Group and its shareholders and the firm desire to progress the restructuring negotiations,” the statement further explained.

“The group is committed to an open dialogue regarding the future governance (including the creation of nomination and remuneration committee) of the company with the aim of creating added value for all stakeholders and creating a platform for future growth. The company believes the elements for this restructuring are possible.”

Moby also highlighted that “The value of the group’s fleet, based on the latest Unitramp appraisal and valuation, exceeds € 1 billion. If these valuations are confirmed by the broker to be appointed, the restructuring plan can be implemented based solely on the rescheduling of the current debt profile.”

The big question now is: will the banks and the bond holders be patient with Moby or opt for a more aggressive approach as was the file for bankrupt proposed last autumn?

Source: European Commission
Mar 06
0

State Aid: Commission Launches In-Depth Investigation into Public Service Delegation Contracts for Maritime Services to Corsica

By | 2020 Newsletter week 10 | No Comments

The European Commission has launched an in-depth investigation to determine whether the public service delegation contracts for maritime services to Corsica awarded in June 2019 are in line with EU State aid rules.

Maritime services between Corsica and mainland France run between three mainland ports (Marseille, Toulon and Nice) and five ports in Corsica (Ajaccio, Bastia, Porto-Vecchio, Propriano and Ile Rousse). The French authorities awarded Corsica Linea three public service delegation contracts for the routes between Marseille and Ajaccio, Bastia and Ile Rousse, for the period from 1 October 2019 to 31 December 2020.

The Commission takes the preliminary view that these three contracts constitute State aid since, at this stage, they do not meet any of the cumulative criteria for excluding State aid set by the European Court of Justice in its judgment in the Altmark case.

Furthermore, the Commission has not yet ruled out that the public service compensation received by Corsica Linea may give it an undue advantage over its competitors, in breach of the EU rules on services of general economic interest (SGEI).

The Commission has doubts, in particular, with regard to:

  • whether the scope of the three contracts awarded meets a genuine public service need. In particular, the Commission doubts the necessity of including passenger transport in the public service contracts, given the presence on the market of a significant source of commercial supply from the neighbouring port of Toulon.
  • the obligations in the public service contract that do not appear to be necessary or proportionate to the provision of public maritime services: (i) the requirement for a specific type of fleet to be used on certain routes; (ii) the automatic exclusion of Toulon and Nice as possible mainland home ports for public service.
  • whether the compensation parameters could lead to the over-compensation of Corsica Linea as a result of a misallocation of costs between the company’s public service and commercial activities.
  • whether the award procedure for the three contracts complied with EU rules on public procurement, since France was able to apply selection criteria and technical specifications differently for the various tenderers.

The Commission now intends to investigate whether or not its initial concerns are justified. The launch of an in-depth investigation gives France and all interested parties the opportunity to put forward their comments on the measures in question.

Source: European Commission