The Treasury Minister has confirmed that the Steam Packet Company’s debt was refinanced at a fixed interest rate of 1.7% until 2051, following a £78.9 million loan advance for the purchase of the Manxman.
The refinancing, aligned with Manx Utilities’ terms, replaced variable rates, providing “more certainty over forward planning cash flow and reduced interest costs,” the Minister stated.
However, concerns were raised in Keys about the debt’s increase from £78 million to nearly £160 million since government acquisition. The minister disputed this, citing a current debt of £140.9 million and highlighting repayments.
There was also claims that passengers could be paying the penalty for this.
“The total refinanced debt stood at £154.3 million, which now corresponds with £140.9 million,” he said, adding that fare increases were “below inflation” and not linked to debt repayment.
A further debate arose over bond repayment risks. While Manx Utilities maintains its own sinking fund, the Steam Packet’s repayments go to the Treasury, which holds a £29 million sinking fund for the £40 million bond.
“The risk with the Steam Packet bonds sits with the Isle of Man government,” a Lawrie Hopper noted.
However Dr Allinson said that the company is paying the government it owes it and the government is paying the debt via the sinking fund.
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