The supervisory board of Deutsche Bahn (DB) has said it will make a final decision in the autumn over the possible sale of a minority stake in Arriva and DB Schenker.

DB’s management board has been told to draw up an implementation plan for the deal, which DB says is required if it is to meet its investment targets and reduce the group’s debt.

It has been widely reported, although not confirmed by DB, that the group is expected to sell off a 45 per cent stake in both businesses, which it predicts will raise €4.5 billion.

Chairman of the supervisory board Professor Utz-Hellmuth Felcht said: “If we don’t take action, the Group’s debt will increase substantially by 2020.

“A third-party equity interest limits the level of debt and creates the financial scope necessary to continue the quality and investment campaign in Germany.”

DB plans to invest 55 billion in its German rail operations over the next four years. Almost half of that, 20 billion, it will need to raised by itself.

As part of the group’s wider restructuring, DB Mobility Logistics will be merged with DB AG.

7 COMMENTS

  1. So Arriva and DB Schenker could be seperated. What is part sale anyway? Because Arriva already operates Crosscountry, Chiltern Railways, Arriva Trains Wales and soon to take over London Overground shared with TfL. Arriva could also won the Greater Anglia franchise but that’s unlikely going to happen.

    • A partial sale: companies are, one way or another, owned by means of holding shares. I’m simplifying, but DB can sell up to 49% of the shares and retain control of the businesses. The minority shareholder(s) would then share in the profits and would be able to sell on their interest in the business, perhaps for more money, later on, but little, perhaps nothing, would change for the passenger.

    • Also, for what it’s worth, it’s not true to say Arriva will share London Overground with TfL. London Overground is a concession let by TfL. Arriva will operate the trains – a role they currently perform in partnership with MTR. But as the rules of the concession mean that branding, selection of rolling stock, fare-setting, timetabling and revenue risk belong to TfL, the passenger should again not have to notice the change.

  2. Will there be a floatation on the London or Frankfurt Stock Exchange, which might give UK organisations a chance to invest, or will DB merely arrange the private sale of a minority interest in each company to the highest bidders? No doubt we shall soon find out.

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