Battle For Red Funnel: Local Bid Shelved As Private Equity Moves In

A locally backed company hoping to take over Red Funnel has criticised the ferry firm’s decision to pursue a sale to private equity investors — warning it risks another cycle of “short-term ownership” that could harm Islanders.

Vectis Ferries Limited says its 10-week bid to buy Red Funnel has been sidelined in favour of a higher offer from another bidder, believed to be a private equity group.

In a strongly worded statement, Vectis said:

“For 25 years, Islanders have suffered from ferry services owned by short-term investors who repeatedly sell the business on at inflated prices.

"Red Funnel has changed hands three times in that period – and is now set for a fourth.”

The company argues that despite Red Funnel’s past profits, no money has been set aside for much-needed new vehicle ferries.

Instead, it says successive owners have “extracted money from the Island economy and transferred it to global investors with no responsibility or care for the wellbeing of Islanders or the local economy.”

Vectis Ferries Ltd says its own plans would offer a credible, long-term alternative.

Backed by a private shipping company, Island investors, and the Morton family — known for their strong maritime ties — the group says it is ready to commit over £100 million to build next-generation ferries and new shoreside facilities.

The team behind the bid includes Patrick Seely (former Red Funnel Non-Executive Director), Peter Morton (founder of Wight Shipyard), Kevin George (former CEO and Chairman of Red Funnel), Graham Barnetson (former Financial Director of Red Funnel), and shipping consultant James Walton.

Their vision is described as a “radical transformation” of cross-Solent travel, with aluminium ferries reducing journey times and increasing frequency, while also creating skilled jobs at Wight Shipyard.

But the company says those benefits are now “on hold”:

“Red Funnel selling out for a marginally higher price may add a few million to international balance sheets – little more than a rounding error for global banks responsible for billions – but it risks losing substantial growth opportunities for the Island.”

Vectis has also pledged support for the Islanders’ Charter, including reforming what it calls the “broken dynamic pricing model”, which pushes up fares during peak demand.

The group has thanked Island MPs Richard Quigley and Joe Robertson, IW Council leader Phil Jordan, and Sir Paul Kenny for their support.

It is now urging the Government to remind Red Funnel’s lenders of their responsibilities to the community, particularly as the firm received public funding during Covid.

A spokesperson added:

“Vectis remains ready to re-engage at the earliest opportunity.

"Until then, the chance to secure faster ferries, more frequent services, and new Island jobs is on hold – a reminder of what could be lost if decisions about the Island’s lifeline transport services continue to be left with those with no real ties to the community.

"It is time for Islanders to have a say in their future.”

The company also warned that if its bid is ultimately rejected, it has “credible options” to launch a competing ferry service in the future.