Our two ferry companies owe more than half a billion pounds – are Wightlink considering even more loans?

The Isle of Wight’s ferry services are in the spotlight, as IW East MP, Joe Robertson, voices serious concern about Wightlink’s finances.

The firm’s CEO, Katy Taylor, has sparked questions, after failing to deny claims that the company’s owners plan to take £30 million out of the business, leaving Islanders to wonder what impact it would have on already sky-high fares.

The IW Observer asked Mrs Taylor this week about reports that Wightlink’s shareholders are close to finalising a deal that would see the company saddled with an additional £60 million in debt. We received information that Wightlink’s owners, Basalt Infrastructure Partners and Fiera Infrastructure, have earmarked £30 million for a new ferry, with the other £30 million going straight to shareholder pockets.

Mrs Taylor’s response was not reassuring. She did not address the question about the £30 million destined for shareholders at all. She said: “No decisions have been made by Wightlink or its shareholders on the process of commissioning a replacement ship for St Faith, or how it will be financed. Any current speculation is inaccurate.”

How much do the ferry companies owe already?

Both ferry operators are already drowning in debt. Red Funnel owes a staggering £312.9 million (£111.51 million of bank loans and £195.4 million of shareholder loans), while Wightlink sits at £250.4 million (£175 million of bank loans and £75.4 million owned to shareholders) – combined that’s more than half a billion pounds. These huge figures require tens of millions in interest payments every year. The impact is huge.

The two firms owe £40.7 million in annual interest, which can only be passed on to passengers through fares. To put the massive sums into context, it represents £628.18 for every one of the Island’s 64,800 households every year. It’s little wonder that so many Islanders believe exorbitant fares are choking the Island’s economy and harming local businesses, tourism, and everyday life. Add millions more in debt into the mix, and the future looks even more bleak.

Mr Robertson said: “If these reports are untrue, then Mrs Taylor should have been able to deny them. It would be immoral for a ferry company to borrow millions of pounds to pay to shareholders while regularly charging passengers over £300 for a return trip across the Solent with an ever-diminishing timetable.”