By Carole Dennett
At the end of September, Njord Partners, an investment firm that specialises in buying up businesses in financial distress, announced its “acquisition of Red Funnel”. Jakob Kjellberg, Njord’s founding partner, pledged to restore the company’s “financial health”.
But newly published accounts for one of the Red Funnel Group companies, the impressively titled Southampton, Isle of Wight and South of England Royal Mail Steam Packet Company, tell a different story, and suggest celebrations at Bugle Street may be premature. Njord has not acquired Red Funnel. Instead, it has entered into a Sale and Purchase Agreement for Red Funnel Ltd, the group’s “intermediate holding company”. The deal is far from complete and remains subject to government scrutiny under the National Security and Investment Act (NSIA), which aims to safeguard critical infrastructure – including transport links – from ownership that could pose a national security risk.
Given Njord Partners’ previously reported links to Russia, approval may not be quite as straightforward as Red Funnel’s foreign bankers hope.
No mention of new ferries
When we reported the announcement we noted the absence of any commitment to new ferries, despite CEO Fran Collins’ admission in May 2024 that the ships were “nearing the end of their design life.” These accounts reinforce those concerns: while “refits of the fleet,” are mentioned, there is no reference to any new vessels. Moreover, Njord has only committed to providing financial support until October 2026. The banks have agreed not to take action on Red Funnel’s current debts until the end of October 2026. There are no long-term guarantees beyond that date.
Under NSIA, the government has 30 days to conduct a review, which can be extended by up to 75 working days – nearly six months in total. If they find concerns, the government can impose conditions or even block the transaction entirely. So the firm does not yet have new owners and there are no new shareholders registered at Companies House. In reality, despite last month’s fanfare, the existing owners and funders remain firmly embedded in the business.
Other figures in the accounts paint a bleak picture. EBITDA – a key measure of profitability – dropped by £2 million to £9.9 million in 2024 – with a gloomy outlook for 2025. Red Funnel’s share of commercial vehicle crossings slipped to 48.4 per cent, the first time it has dropped below half market share since 2017. Passenger numbers were down 2.8 per cent, and staff costs up 6.5 per cent. But it wasn’t bad news for everyone. Despite the dismal performance, Fran Collins was paid £248,000. The accounts for other businesses in the group, Red Funnel Ltd and Hythe Ferry, remain outstanding and late.
Concerns raised
The Island’s MPs, Richard Quigley (IW West), Joe Robertson (IW East), and the leader of the IW Council, Cllr Phil Jordan, raised concerns when the deal was announced. They have now written jointly to the Cabinet Office to seek a face-to-face meeting to discuss the issues around Njord Partners taking control of our lifeline ferry service. Mr Quigley has also arranged to meet with the Maritime Minister, Keir Mather, which took place yesterday (Thursday).
In summary, Red Funnel may have found a sticking plaster, but there is no long-term stability in the deal – and no plan B if the government deems Njord, with its Russian connections, an unsuitable custodian for our vital ferry service.
Njord buys company that doesn’t exist
Perhaps Njord are not entirely sure what it is they are buying. Their LinkedIn post announcing the deal, breathed not a word of the above, but proudly proclaimed that they had acquired Red Funnel Ferries Limited – a company that was dissolved in 2018!
