PRINSESSE RAGNHILD will
replace COLOR FESTIVAL |
COLOR FESTIVAL sold to Corsica
Ferries
She will be replaced by the end of the year by the PRINSESSE RAGNHILD
Last week Color Line concluded the sale of M/S Color Festival to
Medinvest SpA (Corsica Ferries) for € 49 million or almost NOK 400
million. The proceeds of the sale will generate a profit relative to
book value. The ship sails between Oslo and Frederikshavn in Denmark.
As a consequence of the sale, M/S Prinsesse Ragnhild, which currently
operates on the West Coast Route, will replace Color Festival on the
route between Oslo and Denmark from the end of this year.
Although developments in traffic on the West Coast Route have been
satisfactory, said Color Line, profitability has not been as
anticipated, primarily because of rising operating costs in the form
of significantly higher bunkering prices, the recently introduced NOx
tax, and an increasing number of interruptions to operations because
of weather conditions, which have led to far more cancellations than
were expected when the route was opened. “These factors, combined with
a very healthy market for second-hand tonnage provided the impetus for
the transaction,” says Trond Kleivdal, Managing Director of Color
Line.
Sales of ships to the value of 1 billion kroner in 2007
During the course of this autumn the company has sold ships to a value
of over one billion kroner. All the ships were sold at a profit in
relation to their book value. The market for second-hand tonnage is
buoyant at present. “We are taking advantages of this window of
opportunity by selling off older tonnage in line with the company’s
strategy, which is to invest in high quality cruises and efficient
transport,” says Kleivdal, adding that Color Line is securing for
itself the freedom of action that the company needs in order to
continue developing Norway’s biggest cruise and transport company.
Closures in Bergen and Stavanger
Color Line said regrettably, the decision to close down the West Coast
Route and transfer Prinsesse Ragnhild to Oslo will have consequences
for valued Color Line personnel. The offices in Bergen (19 employees
or 12.6 man-years) and Stavanger (18 employees or 11.5 man-years) will
be closed down.
Since one ship is being phased out, the company will have a spare
crew. Color Line’s seafaring personnel are employed by the shipping
company and not by the individual ship. This means that all the ships
in the fleet will be affected, although it is not yet known who or how
many personnel will be involved. “A close dialogue has already been
initiated with union representatives, and we have jointly agreed to
start what will be a fair and reasonable process. The management and
the union representatives will sit down together to work out the
criteria for downsizing,” says Trond Kleivdal.
A new, modern and environmentally efficient fleet
On 8 February of this year Color Line sold Kronprins Harald to Irish
Ferries for € 43,6 million. On 19 October Peter Wessel was sold to MSC
(Mediterranean Shipping Company) for € 25 million. On 12 November
Silvia Ana was sold to Buquebus for $ 16 million. Now Color Festival
has been sold to Corsica Ferries for € 49 million. In total, Color
Line has sold off older tonnage to a value of one billion kroner this
autumn. All the ships were sold at higher than book value.
Between 2004 and 2008 Color Line is carrying out an extensive and
forward-looking fleet renewal programme worth a total of NOK 7.5
billion, comprising the two cruise ships Color Fantasy and Color
Magic, as well as two new SuperSpeed vessels.
With a fleet of seven ships in 2008 compared with ten in 2004, Color
Line’s capacity for carrying both passengers and cargo will be
greater, but also more efficient. ”Having fewer, but more modern ships
is also far more efficient in environmental terms,” concludes Trond
Kleivdal.
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