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EDITIONS
Thursday, 27 June, 2002, 12:50 GMT 13:50 UK
Q&A: What options for Railtrack shareholders?
The shares of Railtrack Group have been re-listed on the London Stock Exchange, nine months after its subsidiary was put into administration. BBC News Online takes a closer look at the options now available to Railtrack shareholders.

What happens if I hold onto my shares?

The UK government has said it will pay all Railtrack shareholders compensation of 245p-255p.

That will be paid in two instalments.

You will have to wait until the end of January 2003 to get the first slice of 160-180p, and up to a year for the second chunk.

What happens if I choose to sell them now?

If you sell your shares today, you will get the market price, which is currently about 221p.

Railtrack stock, like all share prices, could go either up or down in the next few months.

Experts say it is likely to go down, with more sellers in the market than buyers.

Why would anyone want to sell if they get less money than the promised compensation?

Like the old adage says, a bird in the hand is worth two in the bush.

Some investors are choosing to sell at about 220p rather than wait a year or so to get the 250p.

The decision ultimately boils down to a matter of timing.

Is anyone out there going to be buying the shares?

It seems unlikely.

There is little left of the Railtrack Group now that it has sold off its core assets: the railways network and its stake in the high-speed channel link.

However, it has also off-loaded a significant proportion of its debt along with its key assets.

Eventually, the group is likely to be liquidated.

But some investors may want to take a punt on shares rising in the short-term.

Why are some shareholders still threatening legal action?

When Railtrack went into administration, the shares were valued at 280p.

So most shareholders are likely to lose at least 30p a share.

Railtrack has now abandoned its plans to sue the government for the way it handled the decision to pull the plug on the firm.

It says the cost and length of litigation would be unlikely to benefit shareholders.

But some shareholder action groups still think the government's actions should be challenged.


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