UPDATE 1-Veolia's Transdev in talks with Unishipping about SNCM sale

Mon May 26, 2014 9:06am EDT

Related Topics

* US-Mexico's Baja Ferries in talks about buying SNCM

* Logistics specialist Olivier Diehl to become SNCM CEO

* Source says SNCM has enough cash for coming months (Adds detail on new chief executive, cash position)

By Geert De Clercq

PARIS, May 26 (Reuters) - U.S.-Mexico ferry operator Baja Ferries is in talks with French transport firm Transdev about buying its 66 percent stake in loss-making France-Corsica ferry operator SNCM.

Operator of a ferry line between Topolobampo, Mexico, and the city of La Paz on the Baja peninsula in California, Baja Ferries is part of Paris-based Unishipping, a privately owned shipping group which also operates a Puerto Rico-Dominican Republic ferry and has turnover of about $160 million.

"Our proposal for SNCM seems well accepted by Transdev and was presented to the government," Unishipping Chief Executive Daniel Berrebi told Reuters on Monday.

A source close to Transdev confirmed the talks. "Unishipping is a serious candidate," he said.

SNCM racked up cumulative losses of 250 million euros ($341 million) between 2001 and 2013 and has made a small profit only once in the past decade. Last year the government, which has a direct 25 percent stake in the ferry operator, gave the company 30 million euros to keep it sailing.

Norway's Siem Shipping Inc earlier this month withdrew its bid for SNCM in a blow to environmental services group Veolia whose Transdev unit - which it jointly owns with state-owned Caisse des depots (CDC) - has been trying for years to sell SNCM.

Transdev said on Monday it will propose logistics specialist Olivier Diehl, a former head of DHL France who has also run the French post office's Americas unit GeoPost, as the new SNCM chief executive at a board meeting on Wednesday.

Diehl, 58, is an expert in corporate restructuring and has roots in Marseille, a source close to Transdev told Reuters.

Following the dismissal of SNCM chief executive Marc Dufour - who had sided with the unions against his employer - Diehl needs to put a new restructuring plan in motion and look for a buyer for SNCM.

SNCM's unions are wary of the new management and fear that Transdev will let the ferry operator go bankrupt.

"It looks like the highest levels of the French state, the prime minister and the president, have decided to abandon SNCM, despite the fact that solutions exist," CFE-CGC union representative Maurice Perrin told Reuters on Monday.

The transport ministry was not immediately available to comment.

Veolia has said that the firm needs to go under court protection to shield itself from a European Union order that it repay 440 million euros of illegal state aid.

A source with direct knowledge of the situation told Reuters that as bookings for the summer season come in, SNCM should have enough cash to pay salaries and fuel in coming months.

"Barring anything unforseen during the summer season, SNCM should have no liquidity problems in the short term," he said.

($1 = 0.7336 Euros) (Additional reporting by Jean-Francois Rosnoblet; Editing by Erica Billingham)

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