US finance group eyes up Railtrack

US finance group eyes up Railtrack

The government may not get its not-for-profit rail company if a potential bid by the US finance group Babcock & Brown proves suitable.

Babcock had been considering various financing packages before Railtrack went into administration. None had come under formal discussion.

Guidelines for potential bidders for the beleaguered rail network have yet to be finalised by Stephen Byers, transport minister. Depending on Byers’ guidelines, Babcock’s bid could be for all or just part of the network.

The US company said on Sunday: ‘We have been looking at [Railtrack] for several months. We are keenly interested, but given the political situation over the last couple of weekes we have to wait for certain issues to be resolved,’ the FT reported.

Babcock is largely associated with refinancing packages dealing mostly in originating, arranging and managing large asset-based and project-based financings.

Alan Bloom, Railtrack’s administrator and head of insolvency at Ernst & Young, confirmed this month that he was prepared to override the government’s preference for a not-for-profit company to take over Railtrack by seeking a commercial buyer.

Bloom told AccountancyAge.com: ‘We’re looking at how we fulfil our obligations of transfer. Our advice is that we need to be proactive in this. The government is on the record as saying they’d consider other options.’

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