Eurostar sale: Government offload stake to raise £585m for Treasury

The Government has struck a deal to sell its Eurostar stake to a consortium of investors, including the stewards of Canadian pension savings.

The Treasury announced this morning that it will generate £585.1m in revenues from the sale of its 40 per cent stake in the Channel Tunnel train operator.

Ministers stressed this represents a premium on the £300m price that was widely touted when the Chancellor first invited offers for the stake last October.

“It’s great that we have reached an agreement to sell the UK’s shareholding in Eurostar which delivers a fantastic deal for UK taxpayers that exceeds expectations,” George Osborne said.

Eurostar will also redeem the Government’s preference share in the company on the completion of the sale, raising an extra £172m for the Exchequer.

Three-quarters of the stake will go to La Caisse de dépot et placement du Québec (CDPQ), which manages the pension savings of workers in the Canadian province. A quarter will go to the UK-based infrastructure investor Hermes. The Treasury said that, providing the deal receives the approval of regulators, it should close during the second quarter of 2015.

The remaining stake in Eurostar is owned by the French and Belgian national railway companies. They have pre-emption rights, meaning they could yet acquire the UK’s 40 per cent share by paying a 15 per cent premium on the agreed price. But that is considered unlikely considering the two countries showed no interest in bidding when the original offer was announced. And Treasury sources said there was no reason to expect them to seek to upset the sale on political grounds given the French have worked with the CDPQ in the past.

The deal is the latest chunk of UK rail infrastructure to be snapped up by Canadian money. Two other Canadian pension funds – Borealis and the Ontario Teachers’ Pension Plan – paid £2.1bn for the 20-year contract to run the High Speed One line in 2010. CDPQ has an investment portfolio valued at C$10bn (£5.2bn), while Hermes Infrastructure manages around £3bn on behalf of clients.

Last autumn the Treasury outlined plans to raise £20bn from state asset sales by 2020, with the proceeds earmarked for reducing the national debt. Last week the Government announced another sale of its shares in Lloyds Banking Group, taking its stake below 24 per cent. It has now raised nearly £8bn from sales in the bank, which had to be rescued with public money in 2009.

However, the Government has repeatedly had to shelve plans to sell any of the 80 per cent stake in the bailed-out Royal Bank of Scotland.

The Government sold two thirds of the Royal Mail for 330p a share in October 2013 but the equities were soon trading at 600p, prompting accusations that ministers had sold off the company on the cheap (although the share price has since come down to 424p).

Eurostar began service in 1994 and had more than 10 million passengers in 2014. “We are investing in one of Europe’s most efficient intercity transport systems” said Macky Tall of CDPQ. “Alongside leading industry players, we are becoming partners of a highly strategic asset that will generate stable and predictable returns for our clients.”

http://www.independent.co.uk/news/business/news/chancellor-offloads-eurostar-to-canadian-pension-funds-10083750.html

If they had the time, they'd sell off the House of Commons!

This is great news.

Interesting that you want to be beamed up aliens sassy.
Maybe Captain Kirk can assit you.

You should be beamed up, because you live on another planet. By what stretch of the imagination can selling off more of our assets be classed as a 'good thing'?

risingsun wrote:You should be beamed up, because you live on another planet.  By what stretch of the imagination can selling off more of our assets be classed as a 'good thing'?

So back to infantile insults based on your unsubstanciated views.
It is not cost effective so it makes every sense to sell off, but yeah sassy ignores the facts again.

Eurostar hails 'record-breaking' year as profits jump

http://www.independent.co.uk/news/business/news/eurostar-hails-recordbreaking-year-as-profits-jump-9170760.html


So we pour millions of pounds in to set it up, and now it's making a record breaking profit, instead of getting a high percentage of that profit back year after year, we sell it. And you call it cost effective!


Right, I'm off to campaign for a couple of hours,

However, the biggest barrier has been red tape centred on security issues. The Channel Tunnel Act of 1987 requires train operators to screen baggage, while the Border Agency insists that trains are run from dedicated platforms sealed off to prevent illegal immigrants climbing aboard. Initially it was assumed that some of these rules could be eased and that passport checks would eventually be made on board, but this has been vetoed. As a result it is simply not cost-effective to run from many destinations.

http://www.telegraph.co.uk/travel/eurostar/11213051/Eurostars-20th-anniversary-what-now-for-the-rail-operator.html

Any way this is only for a 40% stake, not the whole business.
DOH

The 40% stake that is OUR stake in the channel tunnel train that OUR taxes paid for and should be making a profit for US. DOH!!!!!!!!!!!!

risingsun wrote:The 40% stake that is OUR stake in the channel tunnel train that OUR taxes paid for and should be making a profit for US.  DOH!!!!!!!!!!!!

Which means its already majority privately owned
PMSL

So what? That is on the FRENCH SIDE. The 40% is OUR GOVERNMENT INVESTMENT IN IT, WHICH IS ANOTHER WAY OF SAYING IT'S OUR INVESTMENT IN IT.

And when you have an investment, you don't sell when it's making you money.

Hope you have never had anything to do with finances.

Oh, and BTW THE FRENCH GOVERNMENT HAVE A 55% STAKE IN EUROSTAR, there is only a 5% stake by private holders

DOH!!!!

risingsun wrote:So what?  That is on the FRENCH SIDE.  The 40% is OUR GOVERNMENT INVESTMENT IN IT, WHICH IS ANOTHER WAY OF SAYING IT'S OUR INVESTMENT IN IT.  

And when you have an investment, you don't sell when it's making you money.

Hope you have never had anything to do with finances.  

It means everything as it is majority privately owned, so there is no big deal here.
Investment, that does not pay in the long run?
You really do not know finnance when as seen our railways do not pay.
I am a demand planner which involved money big time love

Read the above. 55% IS OWNED BY THE FRENCH GOVERNMENT, there is only a 5% private stake. DOH!

You even had to be told that twice. DOH!

risingsun wrote:Read the above.  55% IS OWNED BY THE FRENCH GOVERNMENT, there is only a 5% private stake.  DOH!

You even had to be told that twice.  DOH!

Well there is going to be a 50% stake as we can get rid of this and not be budern ed by its problems make money out of this.
This will entice better prospects for employees of this.

DOH

What a non story if ever I heard one

Brasidas wrote:

risingsun wrote:The 40% stake that is OUR stake in the channel tunnel train that OUR taxes paid for and should be making a profit for US.  DOH!!!!!!!!!!!!

Which means its already majority privately owned
PMSL

Which means its already majority privately owned

From the above, Dodgery Doo-Doo can't add or subtract!

And doesn't understand what:

Eurostar hails 'record-breaking' year as profits jump

means in financial terms.

Not really sassy I just did not bother to read the article and made a really bad error. I can live with that, it happens and happy to admit I screwed up.

Well Dodge that's fine, glad you admitted you screwed up.

So yet again the Con Club do there best to make money for their chums.

Thieving Bastards!

thing is ...we can be right crafty here


the cons sell all this stuff to dopey foreigners

then labour can do a major left turn

and renationalise it ...without compensation...seize it from the "greedy foreigner" ...for the good of the nation of course


then in 10 yers time the cons can sell all this stuff to dopey foreigners.................................

Now there is a good idea!

risingsun wrote:

So yet again the Con Club do there best to make money for their chums.

Thieving Bastards!

Nasty party snouts all the way. The Canadians have the bulk of the shares tsold.

How long before they come cap in hand asking for government assistance.

And East Coast Mainline went private the other day after profits soared over the past few years.

They live up to their name all the time - Con Men, fleecing the British Public!

East Coast Mainlines was privatised but the private operator couldn't make any money so they handed the franchise back to the Labour government who took over the running and turned it into profit so the Tories privatised it again.

You couldn't make that up,,,,,,,,could you?

Same old, same old!!!!!! Makes you bloody sick!

risingsun wrote:Same old, same old!!!!!!  Makes you bloody sick!

Must be about the only organisation that was privatised twice,,,,by the Tories

BTW UK government invested £3.7b in Eurostar when the private company got into difficulties, so we are LOOSING £3.2 BILLION!!!!!!!!!!!!!!!!!!!!!!!!!!