Stena buy part of P&O's Irish Sea ferry operation

P&O and Stena have announced the signing of a multi-million pound deal that will see Stena purchase part of P&O's ferry operations and some of its assets on the Irish Sea routes.

Under the deal, Stena will acquire P&O's Fleetwood-Larne route, including the three ferries European Leader, European Pioneer and European Seafarer, and the two P&O ferries currently operating on the Mostyn-Dublin route, European Ambassador and European Envoy. The transaction, which is subject to finalisation of contracts and employee consultation, is anticipated to complete on April 5.

Commenting on the announcement, Managing Director of P&O Ferries, Russ Peters, said: "The proposed transaction is in line with our policy of focusing on our higher yielding ferry routes where we have a competitive advantage. Although some of the details have changed, the transaction would in effect achieve much of what we originally proposed last year."

In a statement Stena said that the agreement first proposed last year follows on the decision by the UK Competition Commission last month to block the transfer of P&O's Liverpool-Dublin route to Stena, and allow the transfer of the Fleetwood-Larne route. Consultations already commenced with employees about the possible closure of the loss-making Mostyn-Dublin service, P&O's shoreside operations at the Port of Mostyn and the Fleetwood head office, will be resumed.

P&O will continue to operate the Liverpool-Dublin route with the existing two vessels, Norbay and Norbank.

Under the terms of the deal, Stena will pay P&O approximately £50 million in cash. P&O's investment in assets at the Port of Mostyn will not be recovered if the Mostyn-Dublin route is closed, and the disposal proceeds will be less than the current book values of the assets being sold. It is understood that P&O will subsequently write down the value of the relevant assets incurring an exceptional charge of approximately £24 million in P&O's 2003 accounts.

P&O will continue to operate services on the Liverpool-Dublin, Larne-Cairnryan, Larne-Troon and Rosslare-Cherbourg routes.

Stena Line currently operates four routes on the Irish Sea: Fishguard-Rosslare, Holyhead-Dublin, Holyhead-Dun Laoghaire and Stranraer-Belfast.

(SP)