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EDITIONS
Friday, 20 September, 2002, 13:58 GMT 14:58 UK
Railtrack suggests bigger pay out
Train
Railtrack will now pay shareholders more than expected
Railtrack Group has said it expects to return 252-260p per share in cash to shareholders, rather than the 245-255p originally thought.

The group told BBC News Online that it had increased the pay-out because it had managed to raise more cash from the sale of some property assets than originally estimated.

Railtrack expects the first instalment of 200-220p per share to be paid by January.

But the Railtrack Private Shareholders Action Group said the offer was still not good enough.

Sell-offs

Railtrack Group is selling off its assets, including railway development properties and telecom services, before putting itself into liquidation.

Last October, the company's track operating division Railtrack PLC was put into administration by the British government after a series of crashes exposed the poor state of the railways.

Railtrack Group, the parent company of the tracks business, said on Friday that it was "very pleased" with the increased offer to shareholders.

But Keith Brent, a leader of the Railtrack Private Shareholders Action group which protested for a larger pay-out, said the increased offer was "clearly welcome news but it is only a few pence more per share than we were offered before".

Railtrack now wants investors to approve the appointment of Deloitte and Touché as liquidators in order to "speed up" the return of cash.

Shareholders will vote at the Emergency General Meeting on 18 October.

Pay-out time

Railtrack chairman Geoffrey Howe said: "The board's priority is now to return cash to shareholders in a tax-efficient manner as quickly as possible through a solvent liquidation of Railtrack Group".

The group is hoping to return the balance of the pay-out, except for 1p per share, by December 2003.

The increased offer represents almost 90% of the group's value last October, when Railtrack PLC was put into administration and shares were suspended at 280p.

But it is still a far cry from the group's peak value of £17 per share in 1998.

Railtrack shares were re-listed on the London market in June, and quickly slumped to a low of 220p as uncertainty about the payout continued.

On Friday, the shares rose 3.4% or 8.25p to 246.75p.

Asset sale

In July, Railtrack shareholders approved the sale of the group's operating division to the not-for-profit company Network Rail for £500m.

The group has also agreed the sale of phase one of the Channel Tunnel Rail Link to London & Continental Railways (LCR), a state-back consortium, for £295m.

The deal was approved earlier this week by the European Commission.

Network Rail has also paid £80m to operate and manage the link.


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