Irish Ferries invests €315m in two new vessels

Irish Ferries invests €315m in two new vessels

Irish Ferries owner Irish Continental Group (ICG) has said its €315m investment in two new ferries will equip it for further growth and is a sign of confidence in the Irish Sea and French passenger markets.

ICG plans to pay €165m to German firm FSG to build a new vessel to replace the Ulysses, which “will be the largest cruise ferry in the world in terms of vehicle capacity”.

In addition to plans for a €144m investment in the WB Yeats ship, it plans to inject a total of €315m in new ferries. Shares in ICG were unchanged in the latest session but were up more than 20% in the year, valuing the company at just under €1.09bn.

Its €165m investment will replace the schedule of its best-known vessel, Ulysses and will have capacity for 1,800 passengers and crew.

ICG said it will pay for 20% of the construction costs by installment, with the rest paid on delivery of the ship. The firm said it would use credit facilities to finance the cruise ferry and that the pre-delivery installments to FSG will be protected by bank guarantees.

The new ship will follow the delivery of another new ship announced last year, the WB Yeats, which will cost €144m. The €165m cruise ferry is being built specifically for Dublin to Holyhead services and will replace the Ulysses, which in turn will replace the vessel Epsilon on the Dublin to Cherbourg and Holyhead sailings.

The €144m WB Yeats will operate full-time on the direct Ireland to France route alongside the MV Oscar Wilde, ICG added.

There was no breakdown of Irish Ferries market share in the Irish Sea, but CSO statistics revealed that in 2016, some 2.7m passengers used Irish ferry ports, with Dublin handling almost two-thirds of all passengers, while the busiest route was Dublin-Holyhead.

Irish Ferries operates Rosslare to Pembroke as well as Dublin to Holyhead, while it sails to Cherbourg and Roscoff in France.

In December, ICG said it had refinanced its debt, with five-year revolving credit provided by AIB and Bank of Ireland.

The finance deal includes a drawing limit of €75m and an additional so-called uncommitted limit of €50m. It added that a 12-year term loan of €75m provided by the European Investment Bank would be available on delivery of the WB Yeats.

It also has private loan note shelf agreements with Metropolitan Life Insurance Company and Pricoa Capital Group. ICG chief executive Eamonn Rothwell said the €315m investment in the new ships “underpins the confidence the group has in the markets in which we operate”. The firm in August reported a 3.7% rise in revenues to €156m for the first half of the year. It said at the time that the delivery of its latest passenger vessel in 2018 would generate cost savings.

Meanwhile, Norwegian Air said it had achieved its key growth targets in 2018, including its first South American flight from London Gatwick to Argentinian capital Buenos Aires. The airline also operates transatlantic flights from Cork, Dublin, Belfast, and Shannon.

It said it would add Chicago and Austin in Texas to its list of new destinations, and did not outline further plans for its Irish bases.

It has been speculated that Norwegian Air would launch new routes from Cork to Stewart International Airport in New York, in addition to its Cork flight to Providence in Rhode Island.

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