Island Echo always welcome letters to the editor, which may of course not reflect the views of the publication and its staff.
Letter to the editor – Tuesday 8th August 2023
“Keith Greenfield, the CEO and Director of Wightlink (WL) recently wrote some public statements which I believe are misleading and attempt to project an image of WL that does not reflect reality.
“In relation to why WL doesn’t pay tax, he stated “ … group accounts show that we have made losses in recent years which is why no corporation tax has been due” This gives the impression WL is making a loss. It’s not. As many know, WL as a stand-alone business makes millions and more than enough to sustain itself. Probably, in much the same way it and its predecessors did for the previous 140 years before the private equity firms (PEF) got hold of it. Although, to be clear as Mr Greenfield also stated “We pay all taxes, rates and rents that are due.”
“Unfortunately, Mr Greenfield failed to add that for every £1 WL pays in tax, they claim roughly £1.5 back in tax rebates. The group accounts that Mr Greenfield refers to are 5 holding companies (Arca Shipping, Arca Bidco, Arca Midco, Arca Holdco, Arca Luxco) and one parent company (Arca Topco) all created by the PEFs after purchasing WL. These newly formed non-operational companies are all connected to and centred around the only company that produces any income, Wightlink Ltd. At this point, it’s helpful to know a little about WL’s history of ownership. In 1995 WL was bought out by its management who then sold it in 2005 to a PEF.
Article continues below this advertisement “Unsurprisingly, this is where we start to see WL via its holding companies being subjected to growing losses and where the gradual decline in services and the hike in ferry fares begins. PEFs only buy businesses that are good investments. Basalt Infrastructure Partners and Fiera Infrastructure are the PEFs that currently own WL. The typical business model of a PEF is to first load the business they bought with debt. This is how they quickly maximise their return on investment. Then they work on ways to maximise cash coming out of the business, such as reducing the service.
“It’s not unusual for the PEF to then loan the money they stripped from the business back to the business charging high interest. No matter how well the business is doing, a PEF will ensure the accounts of the acquired business are making a loss. The advantage is a business that makes a loss won’t pay tax. This is essentially the story of WL since it went into private equity ownership.
“WL is now part of a group of companies that collectively show a loss through the accumulation of debt. So Mr Greenfield is correct, the group makes a loss, but that’s because, under this structure, it’s designed to make a loss.
“The group has a debt of just under £398,000,000 (and possibly much more). Some of this debt can likely be justified through the purchase of WL, the cost of a new ferry and terminal alterations, but as the group’s only operational company, it’s WL’s burden. Of that £398 million debt WL has to cover interest payments on a whooping £330,000,000 at 9.25% a year, set at a time when interest rates were among their lowest. The interest repayment on £330 million will make it a challenge for the group to generate profits in future years, unless they increase ferry fares considerably. Mr Greenfield went on to state he doesn’t receive dividend payments. Technically, this is true. It’s WL’s corporate owners that receive the dividends. WL Director’s payouts are classed as bonuses or remuneration or ‘contractual payments’ which he does receive, but like the dividends and interest payments they all come from WL’s profits.
“Aside from one bonus of £1,875,000 paid to WL Directors for the sale of 50% of WL to Fiera Infrastructure in June 2019. Although, according to pages 22/23 of the 2019 WL accounts, one Director (likely Mr Greenfield) was paid an additional £1.2 million bonus/contractual payment as a result of that sale bringing that particular Directors income that year to £1.55 million if you include his 2018/19 basic salary of £348,000. However, concerning why WL took public funds during the pandemic, Mr Greenfield claimed “There was indeed a very real risk that operators such as Wightlink would run out of cash”. This of course is the reason why WL took a staggering £7.3 million from the public purse in 2021/22. It’s worth noting shortly after that huge bonus was paid the need for more money from HM treasury arose.
Article continues below this advertisement “It appears if WL was run appropriately without deliberately evoking a loss, being stripped of cash and subjected to huge debts at high interest then it wouldn’t get into cash flow issues and require public handouts and millions in tax rebates. In the words of our own MP, “Wightlink, as a company, represent the unacceptable face of capitalism“. PEF’s methods of remodelling and taking financial advantage of businesses can be considered unethical, but not illegal. It’s just WL’s misfortune that it was sold to a PEF. For Basalt Infrastructure Partners, it seems WL is an opportunity to get its hands on millions of taxpayer money while paying its Directors millions for running the service down and bringing WL to its indebted financial knees.
“The FastCat timetable is a fine example of a service that has been run down from what it was 10/15 years ago, with the removal of half hourly crossing supporting commuters proving especially frustrating. Mr Greenfield might argue all is well, but never before has there been this level of protest among Islanders. I am told every prospective Conservative candidate for East Wight referred to the unacceptable situation with our ferry links in their final speeches to voters. Likewise, in addition to the many letters from Islanders and Island businesses such as Wight Karting all venting their anger, there is now also the ever-growing Wightlink User Group protesting that enough is enough.
“The truth is our ferry links have been heavily exploited since they went into private equity ownership and Islanders are paying the price in unnecessarily high fares and a reduced service, while the taxpayer is continually subsidising what is essentially a viable profit-making business in its own right. If, likewise, you feel enough is enough, and you haven’t already, then perhaps consider registering this feeling by subscribing to the Wightlink User Group on Facebook. They are working hard on behalf of all Islanders to get services back at reasonable prices.”
Karl Hunter
Isle of Wight
Thank you for such an informative letter, I have not been able to leave the island for a few years now. My pension will not stretch enough, even with their so called oap rate. So like many others I’m trapped on the island, and look forward to a non corrupt MP to have the balls to sort it out. Shite link need bringing down. And a true island ferry set up that charge a reasonable price, rather than a ransom.
You are just radical leftists, there is no alternative! Public infrastructure was crumbling under the Tories, they had to privatise it.
Nonsense they didn’t have to privatise, they chose the easy way out. And they sold everything cheap which seems to be forgotten.
Public infrastructure is still crumbling, look at the NHS. Tories can’t even look after the public industries that that haven’t privatised.
Finally somebody speaks sense, the government(s) over the years have screwed up everything from the NHS down and some people think they would be better than Wightlink its crazy talk. So much talk about how bad our MP is and how bad the government is and in the next breath – lets give the idiots more to screw up
no – by keeping the car ferry prices high for those turning up on the island, it prevents a significant number of cars arriving on the island and making congestion even worse. Those who can afford higher prices are also likely to be driving more environmentally friendly cars and will have more disposable income.
in other words, less battered up, cheap polluting cars on our roads. A win for the islands environment
day return for an adult £18.80 or £9.40 each way – cheap already.
adult annual season ticket £2081 or £2159 by direct debit in 8 payments. a commuter travelling 5 days a week, for 48 weeks of the year (4 weeks annual leave) works out at £4.33 a trip or £4.49 on direct debit rate. Bargain – how much cheaper do you think that could be – seeing as it is about £20 one way in a cab to newport during peak commuter times.
despite all your waffle karl – £4.33 a trip for a regular commuter is nothing – not even the price of a pint of decent beer.
it is a bargain for me at those prices – what are you complaining about.
Dipstick, he’s talking about the cost of taking a car. It’s agiven that foot passenger prices are ‘good/fair value’.
And where does it say just the car ferry – it doesn’t
also, if you cannot respond to a comment without insulting the person – then perhaps you shouldn’t speak
Are you also saying that the car ferry fares are ‘a bargain’ too?
Can you honestly not see what’s happening?
£318 to take a car with a bike on the roof for a week return…. INSANE!!
What a surprise,they are bent and on the fiddle.
It’s the way the world works and always has been.
I hate that there are outfits all over the world who are engaging in robbery that falls under the umbrella of “unethical but not illegal.” It’s far too pervasive.
So Islanders are unhappy, all th Parliamentary Candidates made reference to this problem when they sought election and the current Island MP says “Wightlink, as a company, represent the unacceptable face of capitalism”. So what does he propose to do about it. It is getting on for four years since the last general election. There comes a time for the talking to stop and the action to begin.
Name one positive thing BS Bob has done for the island. I cannot think of anything!
You get to see his face regularly, online, along with Donna, Crime Commissioner. What more do you want? It could be worse; you could see the face of Diana Abacus. She recently posted her opinions about crossing water in a boat on Social Media.
Most expensive Ferry crossing in the world per mile.
Scandoulous
Incorrect the floating bridge is more expensive and a bigger mess, run by the local government, if you think nationalizing Wightlink would be better think again
Profit per kilometre would be completely different. But you won’t find one of them.
You switched the numbers, it would be different in miles.
No data on that chart, just pretty lines. Needs date and time fare was extracted to make proper comparison. As car ferries don’t easily link up with public transport needs vehicle costs included.
Applause emoji inserted and repeated, sir.
I always felt they were bent as a bottle of crisps, thanks for taking the time to expose their accounting and business practice, now the cheeky beggers are not accepting cash! how progressive and brave these twats are…
Brilliant article. Very informative. Unfortunately while we have a council and MP with no back bone these pirates will continue to exploit the island. As a regular traveller on wightlinks Yarmouth to Lymington route I have seen how much this route has been dessimated over the last 20 years. I see how families feel trapped here due to the extortionate prices these rackets charge. The only 2 ways around this I see is either, public ownership or a fixed link.
Well written and undoubtedly well intentioned but sadly many islanders like myself who were vehemently opposed to a fixed link back in the 1990s have come to the conclusion that a DfT funded Solent road crossing is the only viable solution.
Where would you put the bridge? Where would it be to and from? What would be the impact on extra traffic on Island roads?
Try looking on the fixed link website solentfreedomtunnel
Thanks, that really helped.
My tears of laughter washed out the dust from my eyes caused by recent harvesting going on close by.
Cheered me up no end, I do like a good Monty Python parody.
Thank you. I had no idea Wightlink was being run unethically but legally.
unethically….get lost you hippy socialist ..the owners of the business are making money, which is what it is designed to do
Ooh careful! Someone calls you a dipstick and you’re not happy but you happily label people as radical leftists and hippy socialists! Calm down else people will think you’re Bob Seeley in disguise
you do realise that the name islander can be used by more than one person at a time don’t you.
Yes and if you want to be separated from their comments then separate your name from theirs! It’s not like Facebook where you can differentiate people with the same name by their profile pictures!
you do realise that people copy other names – using a different name doesn’t make any difference
Start by voting out Mr half sausage atthe next general election and vot in someone that has some balls and isn’t indirectly connected to WL. Having said that, I wonder if WL lobby him to make sue of the status quo in Parliament ?
reading this very well compiled explanation of what is very likely going on behind the scenes of WL I begin to realise why this whole country is gradually going down hill. WL won’t be the only business being run in this way by vultures who’s only ethic is to fill their pockets with cash a quickly as posible, avoiding tax along the way, with no regard for anyone else. Seems to me we urgently need a thorough shake up of our taxation and business proceedures which can only be brought about by our members of parliament who, unfortunately, are largly only interested in their own ” well being ” instead of the country. The only means we seem to have to influence this is to complain and when we get the opportunity to vote. A fuitless excersise
if the amoebas that are mp’s didn’t try to tax everything to death, then none of this excellent work by private equity would be required.
instead of trying to steal every penny from every business and person, the government encouraged self sufficiency with tax cuts, then we wouldn’t need to go to such lengths to avoid being mugged off by the state.
Karl, Please Please consider sending this letter to Private Eye. I am sure Mr Hislop would love to get his teeth into this and nation coverage would help Islander case.It would also Help the Echo,s standing as a paper for Islanders.
Good idea. I just might. Thank you. K
This article is spot on, the facts are plain to see. The island is being exploited by these people, and the man in charge, so called Greedy Greenfield is simply a paid apologist. No doubt he’s built up a huge retirement pot too.