By Sophie Sassard and Anjuli Davies
LONDON, March 5 The British government is close
to appointing investment bank UBS to advise on the
possible sale of its 40 percent stake in Eurostar, the fast
speed train that links Britain to Europe, four sources told
Reuters on Wednesday.
The stake could fetch around 300 million pounds ($500
million) and may attract pension funds, infrastructure funds and
sovereign wealth funds, according to the sources, who are
familiar with the situation.
In December, Britain identified its share of the Eurostar
cross-channel rail link as one of a number of government assets
which could be sold off by 2020 to raise money for the public
purse. Bankers had then been invited to pitch and were expecting
the government to appoint a financial adviser in the first
quarter of this year.
"The Government has never intended to retain its 40% stake
in Eurostar. It is seeking to appoint advisers to support our
assessment as to whether a sale, in the current climate, of our
share in Eurostar would deliver value for money for the UK
taxpayer.", said a spokesperson for the Department for Transport
Alongside the British government, French state-owned rail
operator SNCF holds 55 percent of the company and
the Belgian government owns the remaining 5 percent.
A spokesperson for SNCF said that the French company will
monitor the British government's intention regarding its 40
percent in Eurostar as soon as it becomes public. The person
added that SNCF will remain Eurostar's main industrial partner
with 55 percent of the company and also has a pre-emption right
on any change in ownership.
An official announcement on the appointment is expected
within the next few days, one of the sources said.
Several sector bankers said they didn't expect SNCF to buy
from the UK government the remaining stake in Eurostar.
UBS declined to comment.
The sale is part of the British government's plans to
privatise 20 billion-pounds of state assets in the next six
years and to boost private-sector infrastructure investment.
Established in 1994, the high speed rail service transported
more than 10 million passengers in 2013 for the first time in
its history, with revenues rising 7 percent year-on-year to 857
million pounds, it said on Wednesday.
Infrastructure projects attract insurers, pension funds and
infrastructure funds because they offer the prospect of an
inflation-linked return, often with a government guarantee, that
helps them meet life insurance and pension liabilities.