October 15, 2012

RCA seeks to reduce losses with asset sale

Written by  Erwin Reidinger
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AFTER several consecutive years in the red, Austrian Federal Railways (ÖBB) railfreight subsidiary Rail Cargo Austria (RCA) is seeking to improve its financial situation by selling wagons to one of its subsidiaries.

At present RCA's share of equity capital amounts to just 8%. However, with the Austrian government unwilling to inject fresh capital, RCA has decided to sell 4000 wagons with a book value of €22m to its subsidiary Industriewaggon (IWAG) for €77.6m. However, RCA still has a requirement for at least some of the vehicles and will lease them back from IWAG, which will lease the remaining wagons to other operators.

IWAG was established in 2000 and already owns 11,000 freight wagons. Some of the funds from the sale will go to wholly-owned Italian subsidiary Rail Cargo Italia (RCI), which needs €2m Euro to cover recent losses.

RCA blames the lacklustre performance of the Italian economy for this situation but hopes RCI's position will improve in due course.

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