Emergency work is being carried out to extend loans so Sark Shipping can continue to operate.
This will be confirmed at an Extraordinary Meeting of Chief Pleas later this month, with longer-term plans also being drawn up to preserve the company’s future.
The Isle of Sark Shipping Company is the only commercial operator that serves the island, carrying both freight and passengers.
It sails between Sark and St Peter Port Harbour daily, with more frequent sailings during the spring and summer months.
Despite its monopoly, the company has failed to repay a loan which is due to expire at the end of this month.
Sark’s Policy and Finance Committee said approximately £270,000 has been drawn down from the £300,000 loan, with Sark Shipping only paying back interest so far, and none of the capital.
Acknowledging that the loan won’t be repaid before it is due, P&F will instead ask Chief Pleas to agree a short extension, until the end of November.
It’s hoped that giving Sark Shipping an additional three months will allow decisions to be made by P&F and the company on longer term arrangements to repay the loan.
The firm’s financial problems are well documented, with new non-executive directors appointed to the board earlier this year, along with decisions being made to reduce sailings and remove concessions for medical travel.
P&F and Sark’s Harbours, Shipping and Pilotage Committee are said to be working closely with the newly appointed Board “on a range of operational and financial matters affecting the company, with a particular focus on its financial position and the need to ensure the continued provision of a reliable lifeline shipping service for Sark”.
“The Committees recognise that the company has been operating through a challenging financial period and that its financial management arrangements require strengthening,” said a spokesperson for Chief Pleas.
“The Committees consider that a more disciplined and transparent approach is required if the company is to return to a sustainable footing.
“They are, however, satisfied that the newly appointed non-executive directors understand the seriousness of the position and are taking a constructive and rigorous approach to addressing these issues.”
