Finmeccanica in new push to sell transport units - trade union

MILAN, March 18 Tue Mar 18, 2014 10:50am EDT

Related Topics

MILAN, March 18 (Reuters) - Italian defence and industrial group Finmeccanica has launched a new push to sell two transport units after reaching a deal with Dutch railways over a dispute involving troubled train-making division AnsaldoBreda, an Italian trade union said on Tuesday.

On Monday, Finmeccanica agreed with Dutch railways to settle a dispute over a 400 million euros ($557 million) train contract in a move that could make it easier for the state-controlled conglomerate to sell loss-making AnsaldoBreda.

Finmeccanica has been trying to dispose of AnsaldoBreda as part of a broader asset disposal plan to cut debt.

Finmeccanica has previously said it could combine its profitable signalling and transportation unit Ansaldo STS with AnsaldoBreda to create a single transport business that could attract buyers.

"Management at Finmeccanica has said it is ready to sell its Ansaldo STS and AnsaldoBreda units and in these last few hours has been putting them on the market," the UILM trade union said in a statement.

Trade unions are concerned any sale could lead to job cuts.

Finmeccanica declined to comment.

Netherlands Railways stopped using the high-speed "Fyra" trains produced by AnsaldoBreda in 2013 saying they were unable to cope with severe cold weather.

Belgium's railway operator SNCB also cancelled an order for the same trains for the same reason.

On Tuesday SNCB, which did not actually accept any trains for delivery deeming them unsatisfactory, said it was still claiming 40 million euros in damages as a result of failings in the Fyra's service.

"The news is certainly positive for Finmeccanica since ... it removes a legal risk to the tune of up to 350 million euros, facilitating the sale of Breda," Italian broker Intermonte said of the Dutch settlement.

Last June, the head of AnsaldoBreda said the cancellation of the train orders by the Dutch and Belgian railways was a major blow and could complicate any sale.

In February, China Cnr Corporation and Insigma said they had expressed interest for Ansaldo STS and AnsaldoBreda.

($1 = 0.7180 Euros) (Reporting by Stephen Jewkes and Paolo Biondi; Editing by Mark Potter)

FILED UNDER:
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article