Government sells off Eurostar stake for £757m

Osborne calls it "a fantastic deal for taxpayers", but critics accuse him of selling family silver

Eurostar stock

The government has reached agreement to sell off its entire stake in the Eurostar for £757 million, the Treasury has announced.

Ministers said the sum raised was "significantly ahead of expectations" when the UK's shareholding in the cross-Channel rail link operator was put up for sale in October.

A consortium of institutional investors - Caisse de depot et placement du Quebec (CDPQ) and Hermes Infrastructure - have agreed to acquire Government's 40% stake for £585.1 million.

In addition, Eurostar has agreed to redeem the government's preference share, raising a further £172 million for the Exchequer.

The government's Eurostar stake was originally identified as a possible candidate for sale in Chancellor George Osborne's 2013 Autumn Statement 2013 as part of a £20 billion sell-off of official assets.

Mr Osborne said that it was "a fantastic deal for UK taxpayers that exceeds expectations".

"Investing in the best quality infrastructure for Britain, getting the best value for money for the taxpayer and tackling our country's debts are key parts of our long term economic plan, and in today's agreement, we are delivering on all three," he said.

CDPQ is a Canadian institutional fund manager with investments worldwide in major financial markets, private equity and real estate.

Hermes Infrastructure - part of Hermes Investment Management -is a UK-based fund managing approximately £3 billion on behalf of clients.

Manuel Cortes, leader of the TSSA rail union, said: "George Osborne, because of his outdated belief in unvarnished Thatcherism, is once again selling off the family silver for short-term financial gain.

"The reason that France and Belgium already own the majority stake in Eurostar is that they believe in running a publicly owned railway for the benefit of everybody.

"One-eyed Osborne, on the other hand, prefers the private English model where fat cat bosses are at the front of the queue, way ahead of the passengers."

Mick Cash, leader of the Rail, Maritime and Transport union, said: "The news today that the government has reached a deal to sell off the British slice of our cash-generating Eurostar assets before the May election is pure Thatcherite industrial vandalism that makes us a laughing stock across Europe.

"The Eurostar sell-off is a gross act of betrayal of the British people by a right-wing government hell bent on selling off the family silver regardless of the real cost.

"The French and Belgians think we are insane knocking off such a valuable and strategic infrastructure asset.

"The Eurostar sell-off is just another short-sighted, pre-election act of public sector destruction based on a bankrupt pro-privatisation ideology coming hot on the heels of the East Coast handover to Virgin/Stagecoach ."

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