French rail operator SNCF mulls buying UK government stake in Eurostar
18 Dec 2014
French rail operator SNCF is mulling using its pre-emption rights and buy the 40-per cent stake in Eurostar International Limited, the high-speed train service connecting London with Paris and Brussels, put for sale by its partner, the British government, in order to block other bidders from buying into the lucrative service.
French newspaper Les Echos said that the British government will shortly release the names of shortlist bidders for its 40-per cent holding in Eurostar, which runs through the Channel Tunnel.
The British government had put its stake for sale in October and analysts say that the sale could fetch the UK treasury around £300 million ($468 million).
Eurostar is 55-per cent owned by SNCF, UK government through London and Continental Railways holds 40 per cent and state-owned Belgium railway company SNCB/NMBS holds 5 per cent.
Britain, which has part-owned Eurostar for the past 20 years, had in October put its stake for sale as part of the Treasury's plan to reduce national debt by offloading state assets.
''I am determined that we go on making the decisions to reform the British economy and tackle our debts. So we will proceed with the potential sale of the UK's shareholding in Eurostar today,'' chancellor, George Osborne had told the parliament.
SNCF has the pre-emption rights that would allow it to come in at the end of the bidding process and pick up the stake at a 15 per cent premium.
Eurostar, started in 1994, is the only high speed train that directly links the UK to France and Belgium via the Channel Tunnel and has carried over 140 million passengers till date and currently carries 4.9 million passengers annually.
With a change in Paris, Brussels or Lille, passengers can connect to over 100 European destinations, including the Netherlands, Switzerland and even Germany, as well as dozens of cities across France and Belgium.
Eurostar has recently ordered a fleet of new high-speed trains, which will reach speeds of up to 199mph.
The company made a profit of £54 million in 2013 on revenues of £857 million.
