December 06, 2011

Veolia to exit transport market

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VEOLIA has today announced its intention to sell its transport business as part of a plan to dispose of up to Euros 5bn worth of assets in the next two years. The French company is under pressure to stem a slump in its share price in the wake of two successive profit warnings.
Veolia will now sell its 50% share in Veolia Transdev, despite only completing the merger in April. Veolia Transdev had previously scheduled an IPO for the second half of next year with the aim of floating 20-25% of the company. Reuters reports that Veolia CEO Mr Antoine Frerot has suggested Transdev's owner, French state bank Caisse des Dépôts, may now be interested in buying out Veolia's stake in the company, and that financial and industrial investors could also be potential buyers. Caisse des Dépôts said in a statement today that it remains firmly committed to Veolia Transdev and currently has no plans to sell its share of the company, although it did not comment on Frerot's suggestion.

veolia-brb.jpgThe asset sales are intended to help stabilise Veolia's debts, which stood at Euros 15bn at the end of September. The company's shares have lost 56.3% of their value since the start of the year.

Veolia Transdev employs 119,000 people and carries 3.3 billion passengers per year. Its rail activities are diverse, ranging from commuter rail in the United States to regional rail concessions in Germany, an open-access sleeper joint venture with Trenitalia in France and Italy, light rail in 27 cities, and metros in Asia.

Veolia exited the railfreight business in September 2009 with the sale of its Veolia Cargo unit to French National Railways (SNCF) and Eurotunnel.

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