TT-Line, the state-owned operator of the Spirit of Tasmania, is in a high-stakes race to secure a potential $100 million windfall by selling its two existing Bass Strait ferries.
The company is banking on this significant cash injection as it prepares for the arrival of its new vessels, but a looming deadline and a “competitive market” for second-hand ships present a considerable challenge.
According to The ABC, the two current Spirits, each with a “book value” of approximately $50 million, represent a combined asset worth $100 million that TT-Line desperately needs to convert into cash.
The substantial sum is critical for the company, which has faced intense scrutiny over its finances and is bracing for a “substantial loss” this financial year.
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At a parliamentary inquiry, TT-Line chief executive Chris Carbone confirmed an international broker has been engaged for several months to find buyers for the vessels.
While “some interest” has been registered, the market is tough, and the clock is ticking.
“So we’re certainly working with the broker to try and sell our vessels.”
The aged Spirit of Tasmania has been put up for sale.
The new and the old Spirit of Tasmanias.
He said, if necessary, TT-Line was open to selling the ships and then leasing them back until the new vessels come online.
Meanwhile, the new Spirit of Tasmania 4 and 5 are slated to begin commercial sailings by October 2026, and the company admits there’s a “risk” the older ships might not be sold by then.
“I think what I’d say (is) it’s a risk. I think I’m comfortable, though, that we started the process early. So, we’ve started the process effectively more than 12 months out from changeover,” Mr Carbone conceded when pressed by Labor’s Treasury spokesman, Dean Winter, about the prospect of being stuck with redundant vessels.
The new Spirit of Tasmania IV ferry arrives in Hobart after a long trip from Leith in Scotland. However, it is currently docked in Geelong for $900,000 a month. Picture: Hype Productions
Sneak peek inside the new Spirit of Tasmania’s deluxe cabin. Picture: Elise kaine
An interior cabin onboard the Spirit of Tasmania IV. Picture: Elise Kaine
The financial implications of holding onto two extra ships are stark: the new Spirit IV, for instance, is currently costing almost $900,000 a month just to sit idle in Geelong.
Additionally, TT-Line’s finances have been the subject of ongoing scrutiny after the state’s auditor-general last year formed the view it had become insolvent in July.
The company, which was given a $75 million equity injection and had its debt capacity increased from $990 million to $1.4 billion in the same month, disputes the claim.
Despite the state of its books, TT-Line said it has no plans to increase ticket prices on the ferries.
“We’ve operated in a competitive market,” Mr Carbone said.
“It’s a very contested market when it comes to freight, and certainly from a passenger side of things, there’s opportunities for people to fly and rent cars.
“But there’s no planned price increases.”
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