Wednesday, March 15, 2000

Two MHI companies file for Chapter 11
The Boston Globe reports that Massachusetts Heavy Industries Inc., owner of the Fore River Shipyard, and yard operator MHI Shipbuilding LLC filed for Chapter 11 reorganization Monday in U.S. Bankruptcy Court in Boston. T
The action move came two weeks after the U.S. Maritime Administration demanded $47 million in loan payments that the two companies could not meet.
The paper quotes a spokesman for the companies as saying they will continue to look for new financing so the yard can be reopened.
The court action prevents creditors from forcing the liquidation of the shipyard's assets. In addition to the Maritime Administration, creditors include the City of Quincy, the Massachusetts Water Resources Authority and the Massachusetts Development Finance Authority.

Pacificats for sale in BC Ferries bail out
Joy MacPhail, the British Columbia Minister responsible for BC Ferries, and Paul Ramsey, Minister of Finance, has announced a financial restructuring package for the British Columbia Ferry Corporation and a plan to sell its three PacifiCat fast ferries

"BC Ferries is important to the province's economy, its tourism industry and the communities that depend upon B.C.'s marine highway system," said MacPhail. "The refinancing and ongoing provincial subsidy will guarantee stability for BC Ferries."

The refinancing package includes:

  • The removal of BC Ferries' debt of C$1.1 billion.
  • A permanent, annual subsidy of 1.25 cents per liter from the province's motor-fuel tax.
  • A decision to write down the PacifiCats by a total of C$240 million and to offer the three fast ferries for sale.
  • Plans for the wind-up of Catamaran Ferries International, BC Ferries' wholly owned shipbuilding subsidiary.

"This financial plan is the best solution to provide for economic stability over the long term for coastal communities," said Ramsey. "The time has come to put BC Ferries on a sound financial footing and let the corporation get on with the job of managing our essential ferry system."

The government will introduce legislation this session that will pave the way for the debt removal and the financial restructuring of the corporation, the ministers said.

The decision to place the three PacifiCats on the market was made after the corporation carefully assessed concerns of customers, residents along the route, tourism groups and the trucking industry. It is recognized that the sale value of the vessels will be less than the current book value. As a conservative accounting measure, each vessel will be written down on BC Ferries' books to C$40 million from C$120 million.

BC Ferries will continue to operate the PacifiCats on a supplementary basis to demonstrate their value to potential buyers.

"The fast-ferry project was a failed experiment, and now we need to move on," said MacPhail. "The PacifiCats will be put up for sale immediately."
CFI's assets will be sold later this year, after the third PacifiCat is turned over to BC Ferries. "Our government always intended to divest itself of CFI when the third fast ferry was finished," said MacPhail.

BC Ferries' board of directors recommended the sale of CFI's assets as the most cost-effective course of action. The book value of these assets is C$7 million.

"The shipbuilding industry has done excellent work, and we know that new skills have been developed here in B.C.," said MacPhail. "We are confident in the abilities of our private sector and the shipbuilding industry to take these new skills and pursue future economic opportunities."

"BC Ferries has had a proud 40-year maritime history," said Bob Lingwood, BC Ferries' president and CEO. "We now need to return to the business we know best: providing a reliable, safe, efficient ferry transportation service to coastal communities at a reasonable price. This new fiscal framework will allow us to move the corporation forward in a way that will make all British Columbians proud."

On June 17, 1999, the first PacifiCat was introduced into service between Horseshoe Bay and Nanaimo, with the second one following in November.
On Jan. 12, 2000, BC Ferries' president and CEO Bob Lingwood announced that effective Feb. 1, a conventional ferry would replace one of the PacifiCats between Horseshoe Bay and Nanaimo.

Opportunities to use the vessels on other BC Ferries routes have also been reviewed, and the analysis shows the value of the PacifiCats on the resale market likely exceeds their value to BC Ferries as part of its fleet.

BC Ferries will place the three PacifiCats on the market. Their exact resale value is unknown.

Service links cruise ships with cell phone network
Maritime Telecommunications Network (MTN), a subsidiary of American Tower's ATC Teleports Inc., of Fairfax, announced today it will provide the satellite communications network for a new service developed and patented by BT A&M, BT's satellite communications division. This new service, known as `Cruise Connect', will enable passengers and staff on cruise ships to make and receive calls from their cell phones while at sea.

Using the new service, has solved the problem of passenger vessels cruising beyond the reach of cellular signals. Passengers and staff can make and receive calls on their cell phones in exactly the same way as they would on land. Discrete ``mini'' cellular stations are installed on the vessels themselves. These stations are linked, via the MTN satellite communications network, to a mobile switching center within the land based cellular network.

In addition to providing global cell phone coverage while aboard the ship by using MTN's ShipNet technology, an IP broadcast network with a continuous full-time data link, `Cruise Connect' gives passengers and staff the added benefit of being directly contacted on their normal cellular number with the flexibility of the call charges appearing on their regular cellular bill.

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