E&Y appointed as Railtrack administrators
Ernst & Young was yesterday appointed special railway administrators of Railtrack, the struggling rail infrastructure company that collasped at the weekend.
On Sunday Transport Secretary Stephen Byers succeeded in his petition to the High Court to put Railtrack plc into administration. The action was taken following a request from the board for additional government funding to stave off insolvency. Byers refused this request on Friday.
The High Court has appointed Alan Bloom, Chris Hill, Scott Martin and Mike Rollings from E&Y jointly as administrators.
In a statement the firm said: ?The purposes for which the order was made are to effect a transfer of so much of the business and assets of the company as it is necessary to transfer in order to ensure that the management of the rail network may be properly carried on, and to carry on the management of the rail network in the interim period.?
The administrators will retain Railtrack?s directors who will continue to be involved in managing operational issues on a day-to-day basis.
The firm said the government had made funding available to them to ensure the continuation of the operations of the rail network. ?Suppliers who are creditors of the company, and whose invoices are approved for payment by the company in the normal way, will continue to be paid,? according to the statement.
?There will be a review of the larger contracts and in the meantime the contractors will be requested to work on these contracts in line with existing work schedules.?
And the firm added: ?The joint special railway administrators are keen to reassure all staff that their pay and conditions will not be affected by the railway administration order. The legal requirements to continue the operations of the rail network also means that at this stage there will be no plans for redundancies as a direct result of the appointment of administrators. The railway unions are being contacted and notified of the appointment of the joint special railway administrators.?
The financial consequences of yesterday?s actions for shareholders in Railtrack Group are less certain. They will depend on the terms of any scheme proposed by E&Y for the transfer of Railtrack PLC business and assets out of administration as a going concern.
Byers said: ?I believe the announcements I am making today will start the process of rebuilding the rail industry. We need a strong, well managed new company to come out of administration and unite the rail industry under stronger strategic direction and deliver the improvements thatpassengers and freight-users deserve, and a better deal for taxpayers?.