Groupe Eurotunnel prepares to sell GB Railfreight to EQT
20 October 2016 • Author: Katie Sadler, Digital Content Producer, European Railway Review
On the 18 October 2016, Groupe Eurotunnel announced that it had received an offer for the purchase of its subsidiary GB Railfreight (GBRf), the third largest rail freight operator in the UK.
GET stated that the offer will soon be presented to the Group’s staff representative bodies for consultation. Eurotunnel believes that the transaction would give a new direction to GBRf, which was created in 1999, based on the quality and commitment to development of the EQT group.
Groupe Eurotunnel acquired GB Railfreight in 2010 for £25m
GET acquired GBRf in 2010 for £25 million (at an exchange rate of £1=€1.17) and has more than doubled its activities, leading to forecast revenues of approximately £125 million. The Internal Rate of Return for the same period, from 2010 to 2016, estimated at the time of the potential sale, is just above 28 percent.
The Group believes the additional liquidity, following consultation and acceptance of the offer, would open up new opportunities for GET to develop its core infrastructure and transport business, particularly through the delivery of the ElecLink electrical interconnector project, for which the construction works are now getting under way. The Group’s French rail freight activities, managed by Europorte in France, are not included in the offer received. Europorte France will remain focused on its own development to deliver constantly improved customer service, with the goal of becoming the foremost private rail freight operator in France.
“I am convinced that EQT is the right owner to take GB Railfreight to the next level”
Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel SE, said: “I am convinced that EQT is the right owner to take GB Railfreight to the next level, given their strong focus on growth and sustainable long term value creation. GBRf has been a great success, proving that significant value can be generated in this sector. On the strength of its results, the Group will continue to favour long term investments and shareholder return”.