Banks take over UK ferry from Aussie pensions

After refinancing talks broke down, a consortium of banks led by Portugal’s BES has become the new owner of the Isle of Man Steam Packet ferry operator, previously owned by a team of Australian pension funds, advised by Access Capital Advisers, and Macquarie.

A consortium of banks led by Portugal’s Banco Espirito Santo has taken over a UK ferry operator after it failed to agree refinancing terms with a team of pension funds advised by Access Capital Advisers and Macquarie, the operator’s owners.

“The refinancing arrangement provides a long-term commitment from the new owners. A new corporate structure will subsequently be put in place that will simplify the current multi-level structure of the organisation,” the bank consortium said in a statement.

Isle of Man Ferries:
refinancing talks broke down

The refinancing talks broke down over a number of issues, sources close to the process said, including higher margins demanded by banks (the original acquisition loan was priced at pre-crisis levels) and a number of other commercial terms. Another point of contention was the amount of new equity banks were asking the pensions and Macquarie to inject in the business, which the owners thought was underperforming, before they would sign off on the re-financing.

The new owners also said that they do not have plans to sell the asset as a consequence of the repossession.

The Isle of Man Steam Packet Company – the only operator of passenger, vehicle and freight services to the Isle of Man off the coast of Northwest England – was acquired by a consortium led by Macquarie and several Australian pensions in October 2005 for £225 million. The seller was Montagu Private Equity, a European mid-market private equity firm.

Macquarie held the ferry company on its balance sheet for sale and subsequently divested the vast majority of its stake in the business in December 2006 to the other consortium members, retaining a 10 percent holding.

Macquarie did not wish to comment on the refinancing. Access Capital Advisers could not be reached for comment at press time.