Council to plough further €65k into troubled ferry

A LOCAL authority has agreed to plough more public money into a troubled ferry company to help it through its examinership process.

Cork City Council, which has already invested €300,000 in Fastnet Line Ltd, voted last night 26 to four in favour of investing a further €65,000 in the firm, which was put into interim examinership last week.

The money will form part a €300,000 package which the company, which operates the Cork to Swansea ferry route, said it needs to cover expenses during the examinership process.

Half of that money will come from Cork City, Cork County and Kerry County Councils — which between them have already invested €700,000 in the firm — with the balance coming from private sources.

City councillors broadly supported the investment given the ferry route’s strategic economic importance to the south-west.

They discussed the issue at a special meeting convened last night less than a week after the company went to the High Court seeking court protection from its creditors, stating it was insolvent and could not discharge its debts.

An interim examiner was appointed, giving the company 100 days of protection while its business affairs were reviewed with a view to securing its future.

The case is due to be heard in full before the High Court next week.

City manager Tim Lucey told councillors last night that examinership provides the best opportunity for the company to survive.

He also defended the council’s previous investments in the firm — €200,000 last year followed by €100,000 last January based on a business plan signed off by Enterprise Ireland.

The council’s €300,000 investment is by way of secured bonds which are repayable after four years subject to the liquidity of the company.

“But business conditions changed during the year, including significant additional fuel costs of €1.5 million,” said Mr Lucey. “The company took remedial action. It reduced peak sailings during Autumn, and changed the certification of the ship to reduce crew numbers. But that was not enough.”

Lord Mayor Terry Shannon said it is vital for a maritime port city like Cork to have a ferry link.

Cllr Brian Bermingham (FG), who said he supported the investment with “concern and anxiety”, questioned the company’s ability to secure freight business.

But Socialist Party councillor Mick Barry voted against investment in the company under its current ownership model.

“There is a real danger that what we are doing is pouring good money after bad,” he said.

The Fastnet line, a subsidiary of the West Cork Tourism Co-operative Society, has operated the Cork to Swansea ferry service since 2010. In a statement last week, it said its finances have been severely hampered by the continuing rise in world oil prices, but it is committed to the long-term future of the service.

The company hopes to re-commence sailings on April 6, 2012 until September 29, 2012, as part of a restructured business plan.