Growing concerns among Isle of Wight residents regarding the operations of Wightlink, the ferry company that serves as a vital link to the Mainland, features in Private Eye this week.
As all those living on, or visiting the Island will know, the heart of the issue lies in the fare increases imposed by the company. As campaigners have previously stated, fare rises have, in some instances, surged to double the inflation rate over the last decade.
Private Eye points out that the underlying cause of these escalating fares is the hefty debt loaded onto Wightlink by its private equity owners. This financial strategy has led to substantial interest payments, which they say has become a drain on the company’s resources.
The financial mechanics unveiled
Digging deeper, Private Eye explains that Wightlink is controlled through a complex chain of holding companies, ultimately led by the Fiera Group of Canada.
Fiera operates through its Eaglecrest Infrastructure unit, which focuses on acquiring companies that hold dominant market positions with high barriers to entry—essentially, businesses that consumers cannot easily avoid. Wightlink, with its essential ferry services and limited competition (Red Funnel’s Cowes-Southampton routes and Hovertravel’s Ryde-Southsea route) , fits this investment profile perfectly.
Healthy income
In its latest financial statements, Wightlink reported a healthy income of £78.7m for the year 2022/23, translating into a profit of £15.2m. When this was raised by Island resident, Karl Hunter, in May 2023, some of what was claimed was debunked by the Wightlink CEO, Keith Greenfield.
However, Private Eye highlights that this profit was entirely offset by interest payments amounting to £16.8m. A significant portion of these payments enriched shareholders, notably through interest on loans at an exorbitant rate of 9.25 percent.
The impact of Private Equity ownership
Private Eye’s investigation further reveals the financial benefits reaped by the private equity managers and owners. Fiera’s executive chairman, Jean-Guy Desjardins, has reportedly earned over $22m in the last three years.
Basalt Infrastructure Partners, co-owner of Wightlink, and its partners have also seen substantial returns, with earnings of $36m in a relatively short span. Meanwhile, Wightlink’s highest-paid director, presumably CEO Keith Greenfield, received a salary of £377,000.
Private Eye don’t mention the almost £2m bonus paid out to the ‘highest paid director’ in June 2019 in relation to the sale of 50 per cent of the company’s share and 50 per cent of shareholder debt.
Profit versus community
The report by Private Eye underscores the tension between the profit motives of private equity investments and the welfare of communities dependent on the services these investments control.
While such financial strategies may be encouraged by figures like Chancellor Jeremy Hunt for broader investment purposes, the residents facing the consequences of these ownership models may see the matter quite differently.
News OnTheWight has approached Wightlink for a comment in relation to the coverage. We’ll update once we hear back.
