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Wednesday, April 24, 2024

Ferry sale fires up feud over Fjord1

Norway’s largest ferry company, Fjord1, faces a new wave of conflict after a divided county board in Sogn og Fjordane voted to sell its stake in Fjord1 to Torghatten, a rival transport firm that also owns the regional airline Widerøe. Fjord1’s board chairman, several board members and the ferry company’s chief executive officer responded to the pending sale on Thursday by announcing their resignations.

Fjord1 ferries play a vital role in transport along Norway's long coastline. Now another major conflict has erupted over the company's ownership and management. PHOTO: Fjord1
Fjord1 ferries play a vital role in transport along Norway’s long coastline. Now another major conflict has erupted over the company’s ownership and management. PHOTO: Fjord1

The county’s sale of Fjord1 shares was narrowly approved earlier this week by a vote of 16-15 among members of the county board, Sogn og Fjordane fylkestinget. Norwegian Broadcasting (NRK) reported the sale may generate a gain of NOK 1.2 billion for the county treasury, but only if Torghatten buys the county’s entire stake of 59 percent. Torghatten initially agreed to buy only half the stake, for NOK 690 million, with an option for the rest to be exercised if Fjord1 generates good results.

The sale has been disputed, however, because Fjord1’s other major shareholder, offshore firm Havila with 41 percent, claims it has held a right of first refusal to buy the county’s Fjord1 shares. It has threatened to take the case all the way to the Supreme Court if its purchase option was not honoured.

A legal struggle thus looms, and Norway’s competition authorities are also likely to get involved, reported NRK, since the deal reduces the number of ferry firms in Norway from only four to three.

Fjord1, based in Florø, has around 1,300 employees and a fleet of 80 vessels operating along the entire coast of Norway that generated revenues of NOK 2.3 billion last year. Torghatten, based in Brønnøysund, has a fleet of around 100 vessels and also operates more than 1,000 busses through such subsidiaries as FosenNamsos Sjø, Bastø Fosen and Trønderbilene. Torghatten is also the largest shareholder in airline Widerøe, which has not proven to be a profitable investment.

At stake is the ownership and management of ferry services that are vital for people living and traveling around the coast and for tourists. Fjord1 evolved from two traditional county-owned ferry lines in Sogn og Fjordane and Møre og Romsdal, with the latter opting to sell out in 2001. That opened the way for offshore firm Havila to buy its stake in Fjord1, and it’s been a troubled partnership with Sogn og Fjordane retaining control.

Havila’s board members and Fjord1’s top management harshly criticized the process around the narrowly approved sale to Torghatten, while the county earlier has criticized Fjord1’s alleged attempts to strike deals behind its back.

Now the sale appears headed for court, amidst claims that other major potential buyers were interested in Fjord1 including state railway NSB. Outgoing chief executive Dagfinn Neteland claimed a lengthy legal battle between the owners of Fjord1 would be “damaging” for the ferry company. Berglund



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