About the Wightlink Ferries News

Wightlink Ferries - Sold for an Undisclosed Sum

 

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Wightlink Ferries which operates a service between Lymington and Yarmouth on the Isle of Wight, has been sold for an undisclosed sum to investment firm Balfour Beatty Infrastructure Partners LP (BBIP).

 

The acquisition of the ferry company from Macquarie European Infrastructure Fund (MEIF) will not affect existing staffing, pricing, routes or schedules, according to a statement released by BBIP on Monday. Both chief executive Russell Kew and chief operating officer John Burrows, as well as the rest of their management team, will remain in charge of Wightlink. 

 

“Wightlink is a strong and stable company with the opportunity to grow and develop in the years to come,” said Steven Lowry, a partner at BBIP. “We are delighted to be the new owners of the largest cross-Solent ferry operator and are committed to investing in the business, and supporting the management team’s focus on safety and improving customer service.”

 

Kew added that Wightlink, which also operates services between Portsmouth and Ryde and Portsmouth and Fishbourne, has a “strong and secure future with its new shareholders, which is good news for the company, our customers and our staff”. 

 

However, there was some level of concern raised by islanders and those living in Lymington following the acquisition. Nicholas Finney of the Better Ferry Campaign – which was launched last year by three businessmen seeking to take over the ferry operation, put a stop to price rises and increase the number of crossings – said there was a need to question the new owners about their long term commitment to improvements in the service.

 

“The critical issues here for Islanders are the price paid, the conditions attached and the level of debt and debt repayments,” said Finney. “Balfour Beatty Infrastructure Partners LLP has no proven track record of investment in transport operations nor specifically ferries. This means continued reliance on existing Wightlink management.  

 

“Although Wightlink have said that there will be no changes to staffing, pricing routes and schedules, it is clear that much will depend on actual financial performance. Until the Island can ascertain what BBIP plans are and what their expectations of financial performance are, we need to be concerned. 

 

“Fortunately, the imminent establishment of the new Transport Infrastructure taskforce will allow the whole issue of the ownership and long term investment of the private sector transport operators to be fully examined against the needs of the Island. In the meantime, we need to question the new owners about their long term commitment to improvements in the service. The Better Ferry Campaign will seek further detailed information before commenting further.”

 

Under MEIF’s ownership Wightlink invested £70 million in five new ships and improved facilities, but the company was criticised for cutting the number of sailings on its three routes across the Solent. Of particular concern was the axing of late night crossings in 2012. 

 

Isle of Wight’s MP Andrew Turner, added: "This is quite concerning news as BBIP has no track record of operating public transport services, particularly ferries. We need to know more about the new debt levels and gearing of Wightlink, which has not yet been mentioned. If they are not changing the structure, prices or schedules it is hard to see how the Island will benefit in either the short or long term. The investment strategy for BBIP talks about acquiring infrastructure companies providing essential services, with high barriers to entry, inflation-linked cash-flows and attractive operating margins. That could be seen as exploiting monopolies. I will be seeking an early meeting with the new owners to discuss their plans, and the new infrastructure taskforce which will be set up over the next few months will doubtless also be talking to them in depth.”

 

BBIP was established in 2011 and completed its first investment in March 2013. The BBIP LP Fund predominantly invests in operational assets into its key target sectors of transport, energy and utilities across the UK, Europe, and North America. BBIP operates independently of its sponsor, Balfour Beatty plc.

 

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