Fate of SeaFrance in balance after Sarkozy U-turn

The fate of ailing cross-Channel ferry business SeaFrance hung in the balance Tuesday after a court delayed its ruling on a worker cooperative's last-ditch rescue bid after a surprise government U-turn. The Paris commercial court postponed its decision on the CFDT union-backed takeover bid, the last one on the table to rescue the firm, until January 9, after right-wing President Nicolas Sarkozy on Monday decided to back the bid. With unemployment threatening to rise above 10 percent of the workforce four months ahead of a presidential election, the unpopular Sarkozy has made preserving jobs a priority of his as-yet unannounced bid for another mandate. Sarkozy held a meeting with key ministers on Monday and backed the cooperative -- known as Scop -- to be financed by "exceptional" workers' lay-off payments from SeaFrance's parent company, state-owned rail firm SNCF. The cooperative's offer is the only one remaining to save the last French business plying the formerly lucrative Dover-Calais route after the Paris commercial court rejected other bids in November. The company directly employs 880 people in France's hard-hit northwest and at least as many jobs again indirectly. Workers are to finance the new cooperative with their standard lay-off payments as well as the "exceptional" cash, which Transport Minister Nathalie Kosciusko-Morizet said could amount to between 50,000-60,000 euros per worker. Regional authorities have said they could contribute 12 million euros to the company, which along with the workers' indemnities would cover the 40-50 million euros necessary to restart the business. "There was too short a time between the government's announcement yesterday and the court hearing this morning," workers' lawyer Philippe Brun said after the delay was announced. "There's been a political decision, now it has to be implemented." Riot police outside the court held back several hundred SeaFrance employees who had travelled to Paris by coach in anticipation of the hearing. Employee Cyril Deblock said that the government would have to get more involved as only 600 of the 880 employees were committed to investing their lay-off cash in the cooperative as some were close to retirement age. With many seeing a political coup for Sarkozy, who would not be seen as the one to blame if the cooperative venture fails, the workers themselves remain sceptical about Sarkozy's U-turn. SeaFrance competes with the British firm P&O in carrying millions of passengers a year across the world's busiest sea route but both companies have suffered from competition from the Channel Tunnel since 1994. SeaFrance was hit hard by the 2008 financial crisis, and in 2010 it shed 700 jobs and was put into receivership. A P&O spokesman told AFP that the company would take action at European Union level if the cooperative takeover went ahead. "If it's true, it beggars belief," the spokesman said. "If there is any suggestion that the French state will continue to support this company, we will lodge an immediate complaint with Brussels and we will pursue that complaint most vigorously." SeaFrance has been in liquidation since the Paris commercial court on November 16 rejected bids to save the firm, although the company was allowed to continue to operate until January 28 pending a decision on the fresh offer. A bid by French shipping firm Louis Dreyfus Armateurs and Danish ferry company DFDS was rejected because it would have seen more than half the staff sacked, which the court ruled could trigger industrial action that would further damage the firm. A bid by SeaFrance management to buy out the firm, backed by a 160-million-euro loan from SNCF, was blocked last year by the European Commission on competition grounds.