By Carole Dennett
Vectis Ferries (VF) has called on the Government to engage directly with Islanders over the future of Red Funnel, warning that another round of private equity ownership risks leaving the Isle of Wight disconnected for a generation.
In a wide-ranging joint interview with the IW Observer and Island Echo, VF directors Patrick Seely, Peter Morton and Kevin George set out their alternative vision: a long-term, Island-centric model built on shorter, more frequent crossings, modern lightweight ferries built on the Island, and moving away from private equity funding which has served the Island so badly.
The board has impressive credentials. Four of the five directors live on the Island, three have held senior board positions at Red Funnel, and Mr Morton founded Wight Shipyard – one of the UK’s leading builders of aluminium ships and ferries – exported across the world. Together, they argue that their plan offers transformation rather than the short-term financial restructuring cycles that have characterised private equity ownership.
A different model
Mr Seely, a former Red Funnel director, said the Island could not afford “another pass-the-parcel round of private equity firms chasing capital gains.” He warned that Njord Partners, the distressed asset investor now seeking to acquire Red Funnel, had yet to publish any plan for fee renewal or financing. The proposed deal is currently being examined by the Government under the National Security and Investment Act.
“Without new ships and new shore sites, the problems the MPs have raised – reliability, frequency, pricing – cannot be solved,” he said. “We have a plan we can execute tomorrow. The government must not simply stand aside without looking at other options.”
Mr Morton explained that the Vectis proposal centres on next generation aluminium ferries, cutting fuel use by up to 70 per cent compared with the ageing steel fleet. “That means lower costs and a massive reduction in carbon emissions,” he said. “It also means jobs – between 10 to 20 new shipbuilding posts at Wight Shipyard. The Island has unique skills in aluminium construction. It would be a tragedy not to use them.”
Mr George, who served as Red Funnel’s chief executive then chairman from 2014 to 2021, and has now moved permanently to the Island, said the service had lost sight of its purpose. “It’s become about operating ships, not about customers or the Island. We need a no-frills, reliable crossing every 30 minutes, not cruise liner ferries once an hour. That’s how you reconnect the Island and drive economic activity.”
Long-term investors, not short-term gains
The directors stressed that their preferred outcome is not to launch a rival operation but to work with government to relaunch Red Funnel itself. They are in talks with investors about a competing service should that prove necessary but firmly believe that dialogue with ministers now is the priority to ensure that there is the right outcome for the Island.
Mr Morton explained: “Any company has to be profitable, but there’s a difference between long-term investors seeking reasonable returns and private equity funds looking to flip the business for a capital gain. We’ve already found serious long-term backers who understand shipbuilding and want to support the Island.”
“We have held a meeting with Njord, but think it unlikely they would be willing to work with them, as their plans include reducing prices to increase demand.”
Mr Seely added: “This is a strategic decision for the Island’s connectivity, economy and resilience. Ministers must view all viable options before any sale is completed.” He pointed out that Red Funnel had looked for investors for 18 months, and ended up with Njord Partners, a company that specialises in distressed companies, while VF had found investors experienced in shipbuilding to provide support for £100 million investment within three months. He also disclosed that VF’s bid of £112 million for the company had been “guided by” advisors working for the banks that Red Funnel are in debt to, but they had then accepted a higher offer from Njord – which they could make as their plans do not include paying down the company’s massive debts. He also revealed it is rumoured that Njord are currently seeking additional funding in the City, and have clearly not fully defined their plans yet.
The only detail the directors declined to disclose was the precise location of the new landing sites they have identified on both the mainland and the Island. They confirmed options exist which would enable crossings times to be cut to 30 minutes.
A call to government
VF has written to the Secretary of State for Transport urging formal engagement before the Red Funnel sale proceeds. Their plan has the backing of both Island MPs and the council leader, and the VF board has “no problems” with regulation or an independent oversight body which would set service standards and ensure accountability.
“Decisions taken now will determine the Island’s prospects for the next 25 years,” Mr Seely said. “We live here, we know the pain. Islanders deserve clarity, resilience and a clear plan for the future.”
A video of the interview will be available on the IW Observer’s website next week.