Balfour Beatty continues Euro rail sale

Balfour Beatty is selling parts of its German and Austrian rail business to Rhomberg Sersa Rail Group of Austria, in a deal for which the net cash consideration will be approximately zero.

UK-based Balfour Beatty said the disposal continued its intention to divest all of its mainland European rail businesses.

The transaction comprises the German track and plant and Austrian businesses. The businesses have been sold for gross proceeds of £6 million, but the company said that net cash consideration would be approximately zero once the cash transferring with the business was taken into account.

Completion is expected in the first quarter of 2015 and is dependent on competition clearance.

The business being sold generated approximately £80 million (€100.6 million) of revenue in 2013, with reported losses before tax, within discontinued operations, of £8 million (€10.1 million). Some 600 employees will transfer across with the business.

Gross assets at 27 June, 2014, were £36 million (€45.3 million). Balfour Beatty said the disposal would result in a discontinued non-underlying loss on disposal of approximately £25 million (€31.4 million).

It recently completed the disposal of the German Railroad Tuning Business for £1 million (€1.3 million), which it said broadly equated to net asset value. Discussions with potential buyers for the remaining parts of the German and Italian rail businesses are ongoing, it added.