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1995-12-05 DoT-001
Department of Transport

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Telecom sale rings up another rail privatisation success


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British Rail



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Department of Transport

Telecom sale rings up another rail privatisation success
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1995-11-09 Britain creates new train leasing market with #1.8 billion sale (Department of Transport)


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date
5 December 1995
source Department of Transport
type Press release

note 407


The Government rang up another rail privatisation success today as
Transport Secretary, Sir George Young, announced the sale to Racal
Electronics Plc of BR Telecommunications Ltd (BRT). The agreement is
conditional on the approval of Racal Shareholders at an extraordinary
general meeting on 21 December 1995.

Believed to be the biggest non-public, non-military
telecommunications operator in the country, BRT provides a nationwide
fixed and mobile network for the rail industry in addition to an
extensive maintenance, project engineering, design and installation
service. The company, which employs about 2,800 staff, had a
turnover of #174.2 million and made a profit of #17.6 million in
1994/95.

Welcoming the sale, Sir George Young said:

"I am delighted that BRT has now made the successful transition to
the private sector. Its acquisition by Racal Electronics Plc, a
highly regarded blue chip company with nationwide resources and
technical expertise, is excellent news for the railway industry and
confirms the continuing success of the rail privatisation programme.

"Telecommunications in Britain is undergoing rapid growth and
technological development, and under Racal's ownership BRT will enjoy
the opportunity to share in the future, along with its customers in
the railway industry."

Within Racal, BRT will form a stand-alone part of the Racal Network
Services Group, which provides managed telecommunications services
for household names such as ICI, Zeneca, W H Smith and the National
Lottery.

Commenting on the acquisition, the Chairman of Racal Electronic Plc,
Sir Ernest Harrison said:

"This is a tremendously exciting opportunity for Racal, representing
the largest ever acquisition in our core activity of voice and data
communications which already accounts for over 50 per cent of the
groups turnover.

"We have identified transportation as a key area for strategic
expansion. There is considerable growth potential for BRT in both the
rail community and other related markets within the fast-moving
managed telecommunications sector, where Racal has an outstanding
track record."

Sir George Young welcomed the proposed benefits which Racal expects
the sale to bring to BRT staff and railway passengers. Racal consider
that the opportunities for BRT's future growth arise from:

-an increased requirement for telecommunications capacity arising
from pressures to improve efficiencies as part of the railways
restructuring;

-the anticipated need for the railway network and signalling systems
to be upgraded with new telecommunications, infrastructures, and
technologies;

-an increased need for communications to provide more user based
information to railway passengers; and

-opportunities to expand BRT's Network and Carrier Services
businesses into other related markets.

Sir George Young said:

"The acquisition of BRT by Racal follows hard on the heels of last
month's #1.8 billion sale of the rolling stock leasing companies.
Moreover, the sale of a major BR signalling company yesterday to a
subsidiary of BTR - one of Britain's leading industrial firms -
refutes criticism that the private sector is not alive to the very
real opportunities that the privatisation of the rail industry
brings."

Notes to editors

1. BRT's core network consists of approximately 11,000 route
kilometres of trunk cable, 4,000 of which are fibre optic, and an
additional 16,000 route kilometres of cable delivering information to
users. Its voice network has over 72,400 extensions with 269
exchanges, while its data network has over 39,100 terminal
connections.

2. With total revenues last year of #174.2 million, BRT has four
strategic business units including Networks (turnover #116.8
million); Carrier Services (turnover #6.7 million); Maintenance
(turnover #37.5 million); Projects and Works (turnover #13.2
million).

3. An information memorandum was issued for BRT in late May. Final
bids for the company were received in late October.

4. Former British Rail businesses for which sales contracts have
already been signed for transfer to the private sector include the
three rolling stock leasing companies, Signalling Control (UK) Ltd,
OBS (formerly On Board Services) Ltd, Railways Occupational Health
Ltd, and the Ditton Timber Treatment Works.


# = pounds sterling


Railhub Archive ::: 1995-12-05 DoT-001





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