Why we need to act
Isle of Wight County Press January 24, 2014
Letter from Patrick Seely, Nicholas Finney, Andrew Palmer, John Buckland
Better Ferry Campaign:
Mr Bowman sent an excellent letter last week, which deserves a response.
He and Islanders need a better context to the Better Ferry Campaign (BFC). Fundamentally, our objective is not to buy Wightlink on the cheap.
So what are we about? We seek a radical reduction in the £195 million of senior bank debt and a write-off of the shareholder loans. We have proposed a Community Interest Company (CIC) as the company by which, in the absence of any actions by Macquarie we can effect this reduction. The CIC, which is a regulated entity, would have the broadest possible participation by stakeholders in the business (Islanders, the council, employees and potentially business customers).
A debt write down is not a radical idea. Red Funnel wrote down more than one third of its debts in 2008-9 and we understand there is a debt write-down being contemplated by the banks involved in the Isle of Man Steam Packet Company.
Wightlink is deliberately avoiding entering into this discussion and insists we should speak to Macquarie about making an offer for the business. As Macquarie know full well, nobody in their right mind would simply buy Wightlink today. With £195 million of senior bank debt, it is not worth anything from an equity perspective.
The point of our approach is to work with Macquarie to restructure and recapitalise the business in discussion with the banks. It is very different.
But to get to that position the Island needs to say, “enough is enough”. Otherwise there is no incentive for Macquarie or the banks to set down and negotiate a debt reduction involving a CIC.
Long term, we believe a CIC with the debts significantly reduced will provide a better alignment of interests between the business and the Island, enabling more services and lower prices.
Today, there is very clearly a misalignment of interests, as evidenced on the BFC website We would encourage readers to visit the site and see the excellent comments of our supporters to date.
We want everyone to know we are very conscious of our responsibilities to the Island community.It is never easy to effect major change and inevitably there are many people who wish the status quo to continue. And there are some who argue that by raising the ferry issue we are damaging the Island.
Our response is to say the Island will be damaged far more, now and in the future, if we do nothing. Sometimes it is necessary to take short-term pain to gain long-term reward and to have the courage to say so.
In establishing the BF, we want to provide a forum in which Islanders are able to voice their opinion. We are very encouraged by the initial response. In only five days, up to 2,000 Islanders have signed up to the website www.betterferrycampaign.co.uk, Twitter and Facebook. There are many of us who have stored up frustrations over many years.
Now is our time to speak.