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c2c sold by National Express to Trenitalia

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LNW-GW Joint

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Indeed, the ultimate shareholder is the Federal Republic of Germany. However the fact that Arriva UK is British means that they pay British taxes. Subject to any Corporate charges, of course (I have no idea what amount of charges they levy, if any).

It's not only the UK operation.
Arriva (Group) runs operations in a number of EU countries, and the profits come back to the UK first (and pay UK tax).
Some will go the Germany, but it's the Sunderland operation that manages it and makes the investment/returns.
I should think a very high percentage of Arriva's operations deliver value in the UK.
 
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317 forever

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I wonder whether Trenitalia will buy out any other UK franchises? On the face of it, the most likely are Serco's Scottish Sleeper and share in MerseyRail.
 

LNW-GW Joint

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I wonder whether Trenitalia will buy out any other UK franchises? On the face of it, the most likely are Serco's Scottish Sleeper and share in MerseyRail.

I hope they learn to walk before deciding to run!

Merseyrail seems in good shape for the 2 partners, is low risk and only half way through.
I doubt they want to sell.
Caley Sleepers are another thing though, not to mention Scotrail.
The SG would take them both in house, given the chance.
 

fgwrich

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I wonder when we'll start to see the NX Branding removed. Or if the franchise gains a new purposeful livery (and name!) at Last? Some of those 357s are starting to look tired in white again - the one's I used this evening were!
 

507 001

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Not quite the same as a rail franchise, but Stagecoach sold its TfGM Metrolink concession to Transdev (RATP) without any problems.

Although the circumstances were unlike c2c and NX, I think Connex (Veolia) was the only other operator to voluntarily exit the UK rail franchise market, by doing a deal with our friends Govia over South Central.
The other changes of control were by the franchisee being acquired by a new owner rather than the franchise itself changing hands.
I'm not sure at the end of the day there is much difference in DfT terms.
Trenitalia has its franchise passport, and will get some kind of direct award for c2c (for some sort of premium to the DfT).
It might have been different if a non-passport owner was involved.
DfT can always choose to rebid the franchise if it wishes.

Slight correction. Stagecoach sold its Metrolink concession to RATP Dev. Transdev is a separate company not related to RATP in any way.
 

WatcherZero

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Bit more complicated.

RATP owned a minority stake in Transdev (I think 20%? with CDP also owning about a third), when Veolia bought out Transdev in 2010 they gave several Transdev assets to RATP in lieu of cash. Doesn't seem to have lasted long though in 2011 Veolia attempted to sell half of Transdev but the deal fell through, CDP bought back 10% of the company instead, then in 2016....

On December 21, 2016, the Caisse des Dépôts and Veolia finalized the Transdev Group (Transdev) shareholder reorganization agreement, including Veolia’s withdrawal from Transdev, in association with the draft agreement announced on July 29, 2016.
The first step of the agreement, in which the Caisse des Dépôts was to acquire 20% of Transdev’s capital for €220 million, has been completed. As a result of this transaction, the Caisse des Dépôts now holds 70% of Transdev’s capital and takes exclusive control of Transdev, while Veolia retains, on a transitional basis, 30% of Transdev’s capital.

(Caisse des Dépôts is French state investment arm similar to London and Continental Railways in the UK but ten times as large and going back to 1816)
 
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LNW-GW Joint

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Then there's CdPQ which is the Canadian (Quebec) equivalent and is becoming a significant player in UK rail. Owns 34% of Keolis.
Takes a bit of untangling at times. ;)
 

daikilo

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Then there's CdPQ which is the Canadian (Quebec) equivalent and is becoming a significant player in UK rail. Owns 34% of Keolis.
Takes a bit of untangling at times. ;)

From what I have read, the CdPQ is acting as a pension fund in making their investments, whereas the CdD in France is focussed on supporting French industry. There are certainly cases where the CdD has been brought in to provide temporary working capital to compagnies who could not afford alternative financings. In a competitive environment this could be seen as creating an advantage (or removing a disadvantage).
 

Expression357

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Not quite the same as a rail franchise, but Stagecoach sold its TfGM Metrolink concession to Transdev (RATP) without any problems.

Although the circumstances were unlike c2c and NX, I think Connex (Veolia) was the only other operator to voluntarily exit the UK rail franchise market, by doing a deal with our friends Govia over South Central.
The other changes of control were by the franchisee being acquired by a new owner rather than the franchise itself changing hands.
I'm not sure at the end of the day there is much difference in DfT terms.
Trenitalia has its franchise passport, and will get some kind of direct award for c2c (for some sort of premium to the DfT).
It might have been different if a non-passport owner was involved.
DfT can always choose to rebid the franchise if it wishes.

For avoidance of doubt, it will simply be that NXET Trains Limited (who are the
winning franchise of the Essex Thameside franchise competition), who currently are a subsidiary of National Express Group, have been sold to a different holding group.

None of this changes the fact that NXET Trains Limited are the franchise holder with whom the DfT have a contract.

No need for talk of a Direct Award or anything of that ilk.
 

Heartland

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The Italian rail operator may be involved in the new bid for the combined WCML and HS2 franchise. The number of foreign owned franchises appear to exceed those in British hands. There was a time when we were world leaders in rail technology, but with the closing of the former railway works and the driving out of business of the private firms, the true value of government policy over the years since 1980 has been one to favour foreign firm involvement and disregard the interests of the British Manufacturers. May be once Britain has left the EU, fresh opportunities may arise, but the experience and knowledge has sadly disappeared
 

cactustwirly

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Apparently the deal has been approved by the DFT

UK: Italian national railway FS Group has completed the first step in its plan to establish a major presence in the UK rail market, with the closing of Trenitalia UK’s acquisition of Essex Thameside franchisee c2c from National Express Group.

The transaction was completed on February 10, after the Department for Transport granted final consent to proceed with the deal announced on January 11. Trenitalia assumed responsibility for operations with immediate effect.

‘I am pleased that we have been able to conclude this acquisition so rapidly, and we can now immediately start to concentrate on the day-to-day business of c2c’, said Trenitalia CEO Barbara Morgante.

Trenitalia has paid £72·6m for c2c, while parent company FS Italiane takes over the function of guarantor with DfT, paying NEG an extra £35·0m to settle an inter-company loan granted to the franchisee.

The deal resulted in a ‘small’ net profit for NEG. ‘This sale provides National Express with the opportunity to invest further in our strong pipeline of growth opportunities in markets where we consistently receive strong returns’, said Chief Executive Dean Finch.

Trenitalia is to retain c2c’s brand and current structure, led by Managing Director Julian Drury. It said the franchise would benefit from ‘innovative technology’ proven in the Italian market, such as ‘advanced ticketing’.

‘We are strongly committed to the UK market, and look forward to passengers increasingly benefiting from our experience, competence and ability to innovate’, said Morgante. ‘I am confident that the good relationship established with DfT, demonstrated by our recent mutual co-operation during the change of control phase, will be strengthened and reinforced over the next years, and be leveraged in future common innovative projects in line with British passengers’ demands.’

As part of FS Group’s ambitions to expand internationally, in December 2015 Trenitalia became the first potential new entrant to the UK market to be awarded a Pre-Qualification Questionnaire Passport enabling it to bid for franchises without needing to resubmit corporate data. Last month it announced it would bid for the future East Midlands and West Coast Partnership franchises through joint ventures with FirstGroup.

Source: Railway Gazette

http://www.railwaygazette.com/news/passenger/single-view/view/trenitalia-completes-c2c-acquisition.html

Does that mean that the deal has been completed, and trenitalia now own the c2c rail franchise?
 

Simon11

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Yep, TI owned the c2c rail franchise as of last friday with legals and financials completed.
 

godfreycomplex

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The Italian rail operator may be involved in the new bid for the combined WCML and HS2 franchise. The number of foreign owned franchises appear to exceed those in British hands. There was a time when we were world leaders in rail technology, but with the closing of the former railway works and the driving out of business of the private firms, the true value of government policy over the years since 1980 has been one to favour foreign firm involvement and disregard the interests of the British Manufacturers. May be once Britain has left the EU, fresh opportunities may arise, but the experience and knowledge has sadly disappeared

The Italians have experience and knowledge as well (and if British rail staff can get the pay; conditions and rosters of Italian rail staff I'm all for it)
 

fgwrich

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The majority of 357s still had NX branding on Saturday, I only saw 2 unbranded sets.

We must have passed different sets at different times - I arrived into Fenchurch Street at about 8 on Friday night and one out of the 5 sets had the NX branding remaining. Work started the previous Friday apparently so their not taking their time on it!
 

cactustwirly

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We must have passed different sets at different times - I arrived into Fenchurch Street at about 8 on Friday night and one out of the 5 sets had the NX branding remaining. Work started the previous Friday apparently so their not taking their time on it!

I didn't see any /3 metro units they were mainly /0s so perhaps the debranding is further ahead on the /3s
 

387star

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Looks so like greater anglia people would be forgiven for thinking the same company runs both
 

Hadders

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I'm surprised to see that according to c2c's website the official company name is still NXET Trains Limited and the Registered Office is still located at National Express House, Birmingham.

I'd have though the registered office as a minimum would've moved by now.
 

JaJaWa

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National Express have explained why they quit UK rail, http://www.passengertransport.co.uk/2017/03/i-wouldnt-invest-my-own-money-in-uk-rail/


‘I wouldn’t invest my own money in UK rail’

National Express Group boss Dean Finch says slowdown in UK rail growth is likely to present significant financial challenges for many operators

Dean Finch has emphasised his belief that transport companies are facing significant and growing financial risks from recently-awarded UK rail franchises by indicating he would not invest his own money in them.

Speaking after the sale of NEG’s last UK rail business, c2c, to Trenitalia for £72.5m, the National Express Group chief executive suggested that any investment firms that view UK franchises as attractive prospects are wrong. “For some, UK rail represents a paradigm of asset light businesses. I earnestly hope no-one of that view is managing my investments,” he commented.

Part of the reason for NEG exiting UK rail is he believes that rival companies are competing over-aggressively for contracts, basing bids on double-digit revenue growth to fund huge premium payments to government.

“I saw no prospect of winning further franchises in the current bidding environment,” Finch told City analysts. “This environment has changed considerably since we bid for c2c [in 2014] and emphatically not for the better.”

Although c2c requires relatively low growth to meet financial targets compared to new franchises such as Virgin Trains East Coast, TransPennine Express and Abellio East Anglia, Finch was concerned that weakening patronage trends evident across the industry had created a risk of substantial losses over the contract term.

Setting out the benefits NEG would gain over rival groups by exiting UK rail, he said: “The slowdown in UK rail passenger growth is likely to present significant challenges to many operators with very high premium obligations. By moving swiftly and firmly, we have both removed this risk and replaced it with the opportunity for further targeted investment [in other countries].

Elaborating on the reasons for the c2c sale, Finch said the company had significantly outperformed other operators in the past year by growing revenue nearly 6%. However, he was concerned that general trends towards lower growth meant c2c faced potential losses over the next decade of up to £200m. He also indicated that c2c may face challenges in making a profit this year.

“What I saw was a business earning a wafer thin margin with a further £10m increase in premiums in 2017, meaning we would have to grow revenue by 6% to offset this increase alone against the background of
other significant cost increases and slowing revenue growth,”
he explained.
 
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