Arriva to be floated on stock market

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Deutsche Bahn is expected to sell a 45% stake in Arriva on the stock exchange, once a final decision has been made this autumn. JADE SMITH
Deutsche Bahn is expected to sell a 45% stake in Arriva on the stock exchange, once a final decision has been made this autumn. JADE SMITH

45% stake in the business to be sold off to raise an anticipated £3.6bn for German state-owned parent company Deutsche Bahn

Deutsche Bahn (DB) is pushing ahead with plans to float Arriva on the Stock Exchange as part of a sell-off to raise an anticipated €4.5bn (£3.6bn), The Guardian reported.

The supervisory board of the German state-owned group is expected to approve plans for a part-privatisation of both Arriva, which operates in 14 European countries outside Germany, and the international freight logistics subsidiary DB Schenker, with the final decision expected in autumn this year.

DB is likely to sell a 45% stake in both subsidiaries. It is seeking to reduce its €17.5bn debt and invest in modernising German railways.

Quoted in the Railway Gazette, DB Supervisory Board Chairman, Professor Utz-Hellmuth Felcht, said: “If we don’t take action, the group’s net debt will increase substantially by 2020.

“A third-party equity interest limits the level of debt and creates the financial scope necessary to continue the quality and investment campaign in Germany.”

As part of the restructuring of DB Group, the supervisory board also decided to dissolve the two-tiered holding structure of DB AG and DB Mobility Logistics AG, with the two entities to be merged. This reflects the fact that the Mobility Logistics IPO was cancelled in 2008 ‘due to the financial crisis.’

An Arriva spokesman said: “Arriva has a strong track record of investment in the UK, investing £549m in the past five years and employing 28,000 people across the country.

“Deutsche Bahn is considering a third-party minority holding in Arriva which is intended to continue the successful development of Arriva and enable further investments in future growth.”

A spokesman for Arriva also told CBW: “The DB Supervisory Board has confirmed that an implementation plan for a third-party minority holding in Arriva will now be developed.

“This is intended to continue the successful growth and development of Arriva and the wider DB Group and the group’s strong track record of investment. A final decision is planned for the autumn.”

Rail union RMT’s general secretary, Mick Cash, commented: “This potential fire sale of a large chunk of DB’s UK rail assets to the same old gang of spivs and speculators has set the alarm bells ringing for all Arriva and DB Schenker staff who once again see their livelihoods traded from under them as nothing more than units on a balance sheet.”

Deutsche Bahn (DB) is pushing ahead with plans to float Arriva on the Stock Exchange as part of a sell-off to raise an anticipated €4.5bn (£3.6bn), The Guardian reported.

The supervisory board of the German state-owned group is expected to approve plans for a part-privatisation of both Arriva, which operates in 14 European countries outside Germany, and the international freight logistics subsidiary DB Schenker, with the final decision expected in autumn this year.

DB is likely to sell a 45% stake in both subsidiaries. It is seeking to reduce its €17.5bn debt and invest in modernising German railways.

Quoted in the Railway Gazette, DB Supervisory Board Chairman, Professor Utz-Hellmuth Felcht, said: “If we don’t take action, the group’s net debt will increase substantially by 2020.

“A third-party equity interest limits the level of debt and creates the financial scope necessary to continue the quality and investment campaign in Germany.”

As part of the restructuring of DB Group, the supervisory board also decided to dissolve the two-tiered holding structure of DB AG and DB Mobility Logistics AG, with the two entities to be merged. This reflects the fact that the Mobility Logistics IPO was cancelled in 2008 ‘due to the financial crisis.’

An Arriva spokesman said: “Arriva has a strong track record of investment in the UK, investing £549m in the past five years and employing 28,000 people across the country.

“Deutsche Bahn is considering a third-party minority holding in Arriva which is intended to continue the successful development of Arriva and enable further investments in future growth.”

A spokesman for Arriva also told CBW: “The DB Supervisory Board has confirmed that an implementation plan for a third-party minority holding in Arriva will now be developed.

“This is intended to continue the successful growth and development of Arriva and the wider DB Group and the group’s strong track record of investment. A final decision is planned for the autumn.”

Rail union RMT’s general secretary, Mick Cash, commented: “This potential fire sale of a large chunk of DB’s UK rail assets to the same old gang of spivs and speculators has set the alarm bells ringing for all Arriva and DB Schenker staff who once again see their livelihoods traded from under them as nothing more than units on a balance sheet.”