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Railhub Archive
2001-10-10 RTK-001
Railtrack Group plc0
Railtrack Group plc ('Railtrack Group') demands restoration of shareholder value
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   Railtrack Group plc ('Railtrack Group') demands restoration of shareholder value
_______________________________________________________________
type Press release
note CA012810003
Directors of Railtrack Group today met with officials from the Department of
Transport, the Environment and Regions (the 'Department') in order to demand
restoration of shareholder value.
On behalf of the board the Directors demanded that value for shareholders was
protected through:
ITEMS AGREED
o The Government ensuring that Railtrack Group gains immediate access
to the £370 million of cash which is being withheld from the company by HSBC.
Agreement was secured in principle that £370m would be available to
shareholders in cash at the time that the new not for profit company is
formed. This equates to some 70 pence per share of value.
o Confirmation that the Government will ensure that Railtrack Group can
continue to meet its short term cash requirements whilst the items tabled are
under discussion.
ITEMS TABLED BUT OUTSTANDING:
o It is required that the Secretary of State confirm that Railtrack
Group remains entitled to the Channel Tunnel Rail Link concession, which has
an estimated value to Railtrack Group in the region of £400 million
(equivalent to a further 75 pence per share). The Government, will need, for
example - to ensure Railtrack retains an ability to securitise future revenue
streams and undertake certain other actions to ensure Railtrack Group is able
to run this concession, or realise value for it.
o The Government agreeing that it will enter into discussions on fair
compensation to shareholders to increase the total value per share to the £
3.60 demanded. Taking into account dividends paid since privatisation, and
the cost of capital, directors believe that £3.60 represents fair return to
shareholders from privatisation.
The Company indicated that if Government committed to restore shareholder
value to £3.60 per share in total they would waive certain potential claims
and be in a position to recommend to shareholders that this be accepted. We
understand that the items tabled but outstanding will now be discussed by
Ministers.
- ends -
All recent press releases can be found on the Railtrack web site
www.railtrack.co.uk
Railhub Archive ::: 2001-10-10 RTK-001
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