AusRAIL, Market Sectors

Sea Containers forced to warn on its future

<p>Sea Containers has been forced to warn that it may not survive in its present form. The company is selling off its ferry operations and other assets in an effort to boost liquidity and cut losses.</p> <p>However, Sea Containers told the New York Stock Exchange before opening yesterday (Monday, May 1) that an unqualified audit of its twice-delayed 2005 results was expected to include a paragraph "raising substantial doubt about Sea Containers’s ability to continue as a going concern". </p> <p>The company recently revealed a US$500m asset write down, deepening the expected 2005 deficit, and putting it in breach of some of its loan covenants. Discussions with the banks had been continuing for several weeks but none of the banks had taken any action against Sea Containers, the company said. </p> <p>Once the ferry operations have been sold, Sea Containers’s core business will be container leasing and rail operations. </p> <p>However, Sea Containers is in dispute with its joint venture partner in the GE SeaCo joint venture, General Electric. The company received an arbitration decision last week but has not revealed it.</p> <p>The GE SeaCo businesses, including those in Australia, are all understood to be profitable. </p> <p>Sea Containers also owns other businesses in Australia independently of GE SeaCo, including reefer container operations and depots in Melbourne. </p> <br />