There are rumours swirling that Arcus Infrastructure Partners (AIP), the company which has been investigating buying Red Funnel ever since eight of the company’s directors resigned in February has finally walked away from any possible deal.

Both the troubled cross-Solent ferry operator and the investment company that manages European assets worth €9 billion have remained tight-lipped since the IW Observer disclosed that AIP’s senior investment director, Edward Lilley, had written to a number of the Island’s elected representatives asking whether they could rely on them to be “constructive partners” if a deal could be reached. It is understood that he did not get positive responses from any of those he contacted.

Mr Lilley disclosed in the email, despite denials from the ferry operator to staff and others, that in February “the company and its lenders initiated an urgent sale and capital-raising process.” He confirmed that millions of pounds was needed for “near-term investment”, to fund infrastructure and new vessels, because the “entire fleet of RoRo ferries is reaching the end of its useful life”. Mr Lilley did not mention that what was seen as the more “immediate need” for funding included £40.7 million for a bank loan that had been due for repayment in July. Insiders said that the bank had extended the loan on a temporary basis to allow a sale to take place. In February Red Funnel borrowed an additional £6 million. It is not known what will happen now, although the IW Observer understands that Irish Ferries had also expressed interest in the company.

The IW Observer recently asked Mr Lilley whether AIP would introduce transparent and fair pricing with public justifications for any preferential rates offered to individual mainland or Island businesses if they invested in Red Funnel. He did not respond.

Both Mr Lilley and Fran Collins, the CEO of Red Funnel, have been approached for a comment.