Pete Bevington

28 June, 2007

DISAGREEMENTS at the top of the Faroese shipping firm Smyril Line have led to the resignation of its managing director Thomas Magnussen.

The company, whose ferry Norröna sails to Lerwick and Scrabster throughout the summer, yesterday (Wednesday) appointed two new temporary chief executives to replace Mr Magnussen who was appointed in December 2005.

The news comes just four months after the troubled ferry firm posted its first profits in four years.

In a statement, Smyril said Mr Magnussen and the board of directors had parted because they "could no longer agree on the running of the company in future".

Board chairman Andras Róin said that he would be acting as a "working chairman" alongside finance director Rúni Vang Poulsen and marketing director Hendrik Egholm who were appointed as temporary chief executives at yesterday's annual general meeting.

"We regret this situation but it is business as usual," Mr Róin said, saying that he did not want to go into the details of the dispute.

The resignation comes as a shock after Mr Magnussen turned around the company's poor financial performance during his short tenure. The year he was appointed Smyril posted record losses of £4.8 million, which were transformed into a £150,000 profit in March this year.

Mr Róin acknowledged that "the resigning managing director has played his part well in the turnaround process of Smyril Line". He said the company was in good financial shape and the outlook was positive.

Last year Smyril angered Shetlanders by dropping the number of visits to Lerwick during the summer to one a fortnight, switching the service to Scrabster. The previous year the company dropped Lerwick from its winter schedule altogether.

Shetland Development Trust has £4.2 million invested in the shipping line, but pulled back from more than doubling its investment two years ago.

Yesterday Bobby Hunter, who represents the trust on the Smyril board, was unavailable for comment.