France-Corsica ferry SNCM needs court protection-minister
PARIS, July 5
PARIS, July 5 (Reuters) - Troubled France-Corsica ferry operator SNCM needs to go under court protection to shield itself from a European Commission order to repay 440 million euros ($600.2 million) in state aid, France's transport minister was quoted saying.
Frederic Cuvillier told French daily La Provence that the loss-making firm, whose unions have been on strike since June 24, cannot continue its activities in its current form without risking bankruptcy and needs an ordered restructuring.
"The situation described by the company's management leads us to think that for this restructuring the company needs to go under court protection," Cuvillier was quoted as saying.
Cuvillier said he had confirmed this in a letter to the unions and that this was the only way to give a future to SNCM.
It is the first time a French government minister has raised this possibility, which the unions oppose because they fear it will lead to job losses and less favourable labour terms.
Owned 66 percent by Transdev - a public transport joint venture between water and waste group Veolia Environnement and state-bank CDC - the ferry operator has racked up cumulative losses of 250 million euros over the past decade despite subsidies it receives from French authorities.
Some legal experts say a Chapter 11-style restructuring would allow a new owner to buy some of SNCM's ships and continue some of its current routes under a new legal structure and with part of the company's staff.
SNCM's restructuring is crucial for Veolia as the current stalemate blocks a plan to sell most of its stake in Transdev - a tram, train and bus operator with turnover of 7 billion euros and 90,000 staff in more than 20 countries - to CDC. ($1 = 0.7331 Euros) (Reporting by Geert De Clercq; Editing by David Holmes)