Rail Cargo Austria buys Hungary's freight operator Mav Cargo for 102.5 billion forint
AFX News: 11.27.07
BUDAPEST - Rail Cargo Austria has won the tender in the privatisation of Hungarian rail freight business MAV Cargo with a bid of 102.5 billion forint, in line with earlier press reports, government officials announced today.
MAV Cargo, touted as a key logistics asset in the heart of the European Union's fastest growing region, went on the block earlier this year as part of government attempts to reorganize the inefficient rail system.
Rail Cargo Austria, the freight unit of Austrian railways company OBB, secured MAV Cargo in a joint bid with local state-owned rail operator GYSEV.
The consortium fended off rival bids from Slovakia's Slavia Capital, which bid 86 billion, and British-American consortium Cargo Central Europe, which bid 57 billion forint.
The highest bid of 103.16 billion forint from US-Dutch investor New World Resources was disqualified because the company attached conditions to the tender including altering a share agreement for workers, MAV Chairman Miklos Kamaras said.
Economy and Transport Minister Janos Koka said the winning bid was 35 times MAV Cargo's earnings in 2007. He added that the new owners have agreed to sell 5 pct of the stock to workers at half the market price before purchasing it back at full market price.
Rail Cargo Austria to buy cargo unit of Hungary's MAV
CargoNews Asia: 28 November 2007
A consortium made up of Rail Cargo Austria and Hungarian firm GYSEV has successfully tendered to buy MAV Cargo, the cargo unit of state-owned rail operator MAV, Hungarian Economics Minister Janos Koka said.
The consortium presented a bid of US$589 million for 100 percent of the Hungarian firm.
The sale is Hungary's biggest privatisation deal this year, and the Austrian-led bid exceeded expectations.
Koka said the winner offered 35 times MAV Cargo's 2007 profit, versus the customary 10 to 15 times the annual profit.
Hungary will use the proceeds from the sale to pay the debts of state-owned railways MAV.
The government won't use the proceeds to pay off sovereign debt but leave it with the railways for its consolidation. The amount isn't included in Hungary's 2007 budget figures. GYSEV, which is owned by the Hungarian state, holds a nine percent stake in the consortium.
Rail Cargo Austria-GYSEV won the bid ahead of Slovakian consortium of Sped-Trans and Slavia Capital Group, which offered to pay 494 million, and Cargo Central Europe, a consortium of a US transport industry firm and a UK financial investor, which offered $328 million.
New World Resources Transportation, a consortium comprising a Dutch financial investor and a Czech transport industry firm, was also among the four final bidders submitting a bid but its bid was invalid. New World's bid was invalid despite submitting the highest offer at $592 million.