29.03.19
Deutsche Bahn to offload rail and bus operator Arriva
Arriva, which runs UK rail franchises including Northern and the London Overground, is to be put up for sale by its owner Deutsche Bahn (DB).
The German state rail operator, which has debts of more than €20bn, has begun exploring a sale or public listing of the UK transport group as it tries to reduce its debt pile.
DB bought Arriva in 2010, acquiring three national rail franchises – Arriva Trains Wales, CrossCountry and Chiltern Railways – as well as Tyne & Wear Metro and a chain of bus companies.
The German firm’s supervisory board confirmed ahead of the publishing of their financial results on Thursday that managers had been told to explore options for selling “up to 100% of the shares” in Arriva.
DB will look for buyers but an IPO also remains an option, and the company said: “The options for a sale of Arriva would help to limit the increase in DB’s debt, while also putting Arriva in a position to generate further financial opportunities for growth.”
Germany’s railway had been under strain in recent years due to ageing trains and a lack of capacity, and the idea of a sell-off of the UK company was raised in 2016.
This was dropped following the Brexit vote as it was thought that investors could be put off and the company undervalued, but with DB’s debt now pushing €20bn the company was reportedly considering selling Arriva again in January.
DB has also held crisis talks with the German transport minister to discuss its dire finances.
In the UK, Arriva’s largest concern is the Northern franchise, which has been beset by problems over performance, timetable chaos and strikes.
Arriva employs 53,000 staff across Europe and last year it generated revenues of €5.44bn.
Image credit - tirc83