UK earns €1 billion from selling Eurostar stake

UK earns €1 billion from selling Eurostar stake
Britain has sold its stake in Eurostar for a cool €1billion. But the French are not the buyers. Photo: Andrew Cowie/AFP
The British government will be happily counting the cash on Wednesday after it reached an agreement to sell its entire Eurostar stake for a much higher price than initially expected. The deal will bring in a cool €1 billion for state coffers.

The British government has reached an agreement to sell its entire stake in the Eurostar train service between London, Brussels and Paris, the treasury said in a statement on Wednesday.

The stake is to be sold for a total of £757.1 million ($1.2 billion, €1 billion), part of a push to raise £20 billion in privatization sales to reduce Britain's debt.

Canadian institutional fund manager Caisse de depot et placement du Quebec (CDPQ) and Britain-based fund Hermes Infrastructure have agreed to purchase the government's 40 percent stake for £585.1 million ($900 million, €804 million).

Eurostar has also agreed to redeem the government's preference share for a further £172 million ($264 million, €236 million).

The government said the sum was higher than what was expected when offers for the stake were invited in October 2014.

"It's great that we have reached an agreement to sell the UK's shareholding in Eurostar that delivers a fantastic deal for UK taxpayers that exceeds expectations," Chancellor George Osborne said in a statement.

Hermes International said the investment offered "stable and predictable cash flows" while CDPQ called the stake "a highly strategic asset".

French and Belgian rail services SNCF and SNCB still have the option of buying the 40 percent stake from Britain if they pay 15 percent more than the agreed price, the statement said.

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