Swedish infrastructure fund’s Nordic ferry investment must be brought to the next level with utilization of synergies and common green and digital tracks across three shipping companies
Know-how about electric ferries and experience with the Turkish Cemre Shipyard, collected by Torghatten, is part of the Molslinjen’s newbuilding project with electric ferries for the Samsø and Alslinjen respectively.
Thus, the utilization of synergies between the Danish Molslinjen and the Norwegian Torghatten, both of which have been owned by the Swedish infrastructure fund EQT since the beginning of 2021, is already a reality. But with Molslinjen’s purchase of the Swedish Øresund ferry company Forsea with support from EQT, there is now a more formal organization across the three Nordic ferry companies in EQT.
“It is a natural time with the purchase of Forsea, i.e. the third shipping company – to create a formal structure around – and to a large extent across – the companies”, says Carsten Jensen, CEO of Molslinjen.
Structure and shared home
It was recently announced that Carsten Jensen will head the newly established company NFI (Nordic Ferry Infrastructure), a holding company under EQT based in Oslo, which will house the three ferry companies. With this, Carsten Jensen also stops as CEO of Molslinjen, which he joined in 2016 from DFDS. Until a replacement is found, however, he holds both posts.
“My task in NFI will be to create a structure and a common home for the three companies, each of which is well run and has some special competences. NFI must pave the way for them to be utilized across the group”.
“At the same time, there are some signs of development, e.g. digitalisation, the green transition and development of new tonnage, which is obvious to work with across companies and thus in a much larger unit. From the start, this has been one of the cornerstones of EQT’s strategy for the ownership of the three ferry companies, and something we at Molslinjen have also already benefited from in relation to the newbuilding project in Turkey”, explains Carsten Jensen.
Two legs
He explains that the holding company has also already been the framework for a refinancing across the companies. It is one of two legs of the NFI; a financial consolidation that creates a better position towards the lenders on the capital markets, while at the same time some transversal financial processes are created between the companies, which also involve national borders.
“My task in NFI will be to create a structure and a common home for the three companies, each of which is well run and has some special competences. NFI must pave the way for them to be utilized across the group”
Carsten Jensen, CEO of Molslinjen
“The second leg focuses on business development. It deals with, among other things, that the synergies are exploited. But also, about constantly focusing on new tenders. Not just in Norway and Denmark. Right now, Torghatten is entering a new tender in Finland, which is a new market for them. Molslinjen has grown significantly in Denmark based on that model – EQT wants this to be continued in a Nordic perspective”, explains Carsten Jensen.
Torghatten’s ferry routes are based on concessions, won in public tenders, which the Molslinjen’s growth outside the Kattegat has also done.
Molslinjen is among the world’s largest operators of large car and passenger fast ferries. How does that status contribute to the formation of synergy in NFI?
“There is no immediate synergy there. But the individual companies all have their own merits. We believe that diversification in this market makes us stronger”, explains Carsten Jensen.
He thus also emphasizes that this is a holding company structure and in no way a merger of the three shipping companies.
This also means that NFI does not have to have a large organisation. But conversely, the organization must not be so small that it creates bottlenecks in the many processes across the three companies we are now going to start with.
“Now I will be spending a lot of time in Oslo, and to a large extent also outside the capital, since Torghatten covers an enormous geography that we are not at all used to in Denmark”, concludes Carsten Jensen.
Four main players
There has been a large privatization of the domestic ferry service in Norway since the turn of the millennium. As a result, Norway today has a very large tender market for private shipping companies.
However, the number of shipping operators has been reduced over the past decade by a consolidation of the market, which has meant that there are currently four major players; Fjord1, Torghatten, Norled and Boreal Transport, listed here by size.
In the management of NFI, Carsten Jensen will work closely with the Norwegian Stein Andre Herigstad-Olsen, who will become director of business development.
Facts: NFI’s three shipping companies
Torghatten:
43 conventional ferry connections and 67 ferries, 15 fast ferry connections and 17 fast ferries. Torghatten is one of Norway’s largest transport companies. Unlike the Molslinjen, Torghatten’s fast ferries cannot transport cars. Torghatten also owns the bus company Norgesbuss AS with around 750 buses. But unlike Molslinjen’s Kombardo long-distance bus concept, Norgesbuss is not an integral part of Torghatten’s passenger concept.
In 2019, Torghatten had a turnover of just over 11 billion Norwegian kroner and transported 70 million passengers.
Molslinjen:
15 ferries, and in a few months, it will be 16 with the delivery of EXPRESS 5, which will be the world’s largest catamaran ferry. The ferries serve nine routes, which together have approximately eight million passengers per year.
Forsea:
Five ferries – including two battery electric ferries. Forsea annually transports more than seven million passengers and 1.3 million cars across the Øresund.
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