Isle of Man News - POSTED Tue 22-05-2018

Due diligence carried out on SPC ahead of deal to buy it

by TH

Due diligence carried out on SPC ahead of deal to buy it - picture

Government says comprehensive analysis and due diligence has been carried out on the Isle of Man Steam Packet ahead of the deal to buy it.

This week it will finalise the deal to acquire the company after Tynwald Members voted in favour of taking strategic control of the Island's sea services.

It will invest £48.3 million to purchase MIOM Ltd – the Steam Packet's parent company and provide £76 million as a loan to the Steam Packet.

Treasury Minister Alf Cannan says: "Comprehensive analysis and due diligence has been carried out on behalf of the Isle of Man Government by independent experts.

"The findings point to the Steam Packet being a well-run and highly profitable business.

"In recent years much of the profit has been stripped out to service the debts laden on the company by its owners.

"By taking a controlling interest the Isle of Man Government will ensure stability for our people and businesses."

A valuation summary by shipping finance specialists Park Partners sets out the methodology used to calculate the purchase price.

It explains how the valuation is based on the cash flow in the business rather than just its physical assets, which includes the vessels. 

The condition of the IoM Steam Packet's vessels is assessed in a technical due diligence report by Braemar, shipping surveyors and consultants.

On-board investigations by marine engineers concluded that the Ben-my-Chree and Manannan have been well maintained.

Both vessels are rated 'good' and scored five out of seven on a sliding scale from unsatisfactory (1) to excellent (7).

The Park Partners and Braemar reports are posted on the Treasury section of the government website.

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