Veolia urges quick SNCM revamp as strike vote looms

PARIS, July 10 Thu Jul 10, 2014 5:05am EDT

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PARIS, July 10 (Reuters) - A quick restructuring of SNCM is indispensable to secure the ferry operator's future, the head of shareholder Veolia said on Thursday as workers prepared to vote whether to end the strike blocking ports in Marseille and Corsica.

A government source said on Wednesday that SNCM unions and a government-mandated mediator had agreed on a plan that would keep the company afloat at least until the end of November.

Workers at the loss-making company, partially owned by Veolia, have been on strike since June 24, occupying ferries and blockading access to part of Marseille's port for 16 days over fears a restructuring would mean less favourable labour terms.

"There is only one solution to save the link between Marseille and Corsica, and this solution requires a court-ordered restructuring..." Veolia Chief Executive Antoine Frerot told radio station BFM Business.

"From my point of view, to come under court protection as soon as possible is the best solution," he added.

Frerot also confirmed that Veolia, which holds its Transdev joint venture with state bank CDC, was willing to sell its stake in SNCM for a symbolic one euro and to give up on obtaining payment of around 100 million euros ($136 million) in debt.

Owned 66 percent by Transdev - a public transport joint venture between water and waste group Veolia Environnement and state-bank CDC - SNCM has racked up cumulative losses of 250 million euros over the past decade despite subsidies it receives from French authorities.

Transdev and the government prefer a Chapter 11-style restructuring that could allow new owners to buy and operate SNCM's ships. For their part, the strikers want assurances that promises to limit job cuts under a past plan will be respected and that investments will be made.

The stalemate is holding up Veolia's plans to sell to CDC 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. ($1 = 0.7331 Euros) (Reporting by Natalie Huet; Editing by Andrew Callus)

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