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Infrastructure (Sale of Eurostar)

Volume 593: debated on Wednesday 4 March 2015

I am pleased to inform the House that the Government have agreed the sale of their entire interest in Eurostar International Ltd (“Eurostar”) for £757.1 million.

The autumn statement 2013 and “National Infrastructure Plan 2013” set out the Government’s ambition to achieve £20 billion from corporate and financial asset sales by 2020. Eurostar was identified as a possible candidate for sale and following a competitive auction process which started in October 2014, the Government have now reached final agreements.

A consortium comprising Caisse de dépôt et placement du Québec (CDPQ) and Hermes Infrastructure has agreed to acquire Government’s 40% stake in Eurostar for £585.1 million. In addition, Eurostar has, on closing of the sale of the Government stake, agreed to redeem HMG’s preference share, providing a further £172 million for the Exchequer.

Eurostar is the high-speed train service linking London, Ebbsfleet and Ashford with Paris, Brussels, Lille and other French destinations. Established in 1994 as a partnership between three railway companies: SNCF, SNCB and British Rail—subsequently London and Continental Railways (LCR)—Eurostar became a single, unified corporate entity owned by three shareholders: SNCF, SNCB and LCR in September 2010. In June 2014 the ownership of the UK holding transferred from LCR, a Department for Transport owned company, to HM Treasury.

The sale receipts will be paid on completion of the contract, which is expected to happen in the second quarter of 2015. SNCF and SNCB—the other shareholders in Eurostar—have the option (the “Pre-emption Right”) to acquire HMG’s 40% stake for a 15% premium to the agreed price of £585.1 million. Closing of the sale to the CDPQ and Hermes Infrastructure consortium is conditional on SNCF and SNCB not exercising the Pre-emption Right. The transaction is also conditional on certain regulatory approvals including EU merger clearance.