AusRAIL, Market Sectors

Decision buoys Sea Containers and GE SeaCo

<p>Troubled Sea Containers has been buoyed by a London arbitration decision virtually ending its dispute with General Electric over their joint venture GE SeaCo, and by news that it is close to selling its Baltic ferry arm and reducing its debts. </p> <p>The GE SeaCo arbitration decision found Sea Containers guilty of four of 15 alleged breaches of the services agreement between the pair, with damages of between US$13m and US$15m to be paid to GE SeaCo. </p> <p>However, the decision also clears the way for the services agreement to be terminated as early as this month. </p> <p>The decision leaves GE SeaCo with much greater independence in running its 1m teu strong container fleet. Chief executive Angus Frew said the two partners were now in accord over the future strategic direction of the joint venture. </p> <p>Meanwhile, Sea Containers is close to a US$750m lifeline sale of its Silja Line ferry operation, according to chief executive Bob McKenzie, which will reduce debts of US$1.3bn.</p> <p>As well as GE SeaCo, Sea Containers’s other major businesses are the GNER passenger rail network in the UK, and Orient Express Hotels. </p> <p>On Monday (May 1), Sea Containers was forced to warn the New York Stock Exchange that it might not be able to continue in its present form. The warning came as the company’s 2005 accounts were delayed for a second time. </p> <br />