Geodis ups offer for troubled Sernam to EUR 750k

Proposals from French logistics company Geodis to acquire troubled parcel delivery firm Sernam are now being assessed by the French court handling the company’s receivership. The proposals were confirmed by Geodis, part of Sernam’s former owners SNCF, after it was told last week by the EU Commission that it will not be liable to repay EUR 642m in state aid provided to Sernam by the French government between 2001 and 2005.

Sernam said yesterday that it appeared that Geodis and its subsidiary BMV, which have tabled separate proposals to buy Sernam, had “significantly” improved their offers for the company.

The offer has been increased to EUR 750,000, according to Sernam.

Geodis and BMV have also amended their recovery plans for Sernam, the acquisition target said, to increase the number of employees who will be kept on to 831, including 684 staff who will be transferred directly to Geodis or BMV. Sernam currently has about 1,600 employees.

A decision by the bankruptcy court, the Commercial Court of Nanterre, is now expected to come on Friday afternoon.

State aid

Sernam originally split from French railway operator SNCF in 2005, but had received state aid from the French government to help it shape up for privatisation.

The EU Commission said last month it still wanted the state aid repaid, seeing the support as unfairly assisting Sernam within a competitive market. But, the French government has been lobbying hard against the requirement, concerned at the potential job losses if Sernam cannot be saved.

Last week, the Commission made a re-interpretation of the situation based on the acquisition plans by Geodis, deciding that the new owner of Sernam would not have to repay the state aid.

Essentially, Geodis would not be liable because it would set up an entirely new company to run the former Sernam business.

Today, Antoine Colombani, a spokesman for competition at the European Commission, explained to Post&Parcel: “In the Commission’s view, based on the plan submitted and applying the legal criteria applicable in EU law, the new entity would not be liable to pay back this amount since there would be no economic continuity between Sernam and this new entity.”

Receivership

Sernam called in the receivers back in January after being unable to shake off its financial difficulties resulting from the recession and the end of a key long-distance rail partnership with former owners SNCF. Current owners Butler Capital Partners, who have an 80.32% stake in Sernam, started looking for a buyer last year.

Sernam currently has a network of 50 branches, 550 tractor-trailers and about 2,900 employees and subcontractors. The company achieved a EUR 298m turnover in 2011.

The company revealed last week that its average daily turnovers for March 2012 were 21.2% down on the same month in 2011 because of a “sharp decline” in freight volumes.

It said in a statement to the media that its already difficult trading environment had been made more difficult by “the spreading of deliberately destructive rumours” about its demise.