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The ‘success’ of Eurostar

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The success of Eurostar?

Investment bank UBS has been hired to handle the sale of the British government’s 40% stake in Eurostar before the election, the Daily Express reported (13 Oct). Earlier this year, HM Treasury took over the stake from London & Continental Railways.

[‘Osborne to signal start of Eurostar sale’, Alison Little, Daily Express,
October 13, 2014]

[…] The chancellor will say he is looking for bids by the end of the month and is hopeful the privatisation of the Channel tunnel train operator will raise up to £300m.

Britain has part-owned Eurostar for the past 20 years, but according to Osborne the sale is part of the Treasury’s plan to reduce the national debt by offloading state assets.

The “success of Eurostar” has encouraged the government to build a second high-speed line linking London with cities in the Midlands and the north, and its sale would lead to a “small” reduction in Britain’s £1.4 trillion national debt, the Guardian reported.

[‘UK government to sell Eurostar stake before general election’, 13 Oct 2014]

The French state-owned railway company, SNCF, owns 55% of Eurostar, while the state-owned Belgian company, SNCB, owns the remaining 5%.

SNCF has indicated that it is not interested in buying Britain’s stake but has a “last look” right that would allow it to come in at the end of the bidding process and pick up the holding at a 15% premium.

Pension companies, investment funds and infrastructure funds are seen as the likeliest bidders, with the UK government hopeful that the sale will be completed in the first quarter of 2015.
[…]
Other state-owned assets being lined up for sale include the legacy Royal Mail pension assets, the uranium enrichment company Urenco, the income-contingent student loan book and further public sector wireless communication spectrum.

Eurostar looks like a ‘bargepole’ asset. As with HS1 Ltd, pension companies or investment funds will be looking for big sweeteners to take on the stake.

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Written by beleben

October 13, 2014 at 12:25 pm

Posted in High speed rail, Politics

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One Response

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  1. […] Eurostar’ (needless to say, Eurostar’s cheap tickets have come at the cost of a UK taxpayer loss running into hundreds of millions of […]


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