Balfour Beatty, the international infrastructure group, has reached an agreement to sell parts of its German Rail business to Rhomberg Sersa Rail Group of Austria.
This disposal continues the firm's stated intention to divest all of its mainland European rail businesses, the results of which are reported in the group's discontinued operations.
The transaction comprises the German track and plant and Austrian businesses. The businesses have been sold for gross proceeds of £6 million (US$9.4 million), but net cash consideration will be approximately zero once the cash transferring with the business is taken into account.
Completion is expected in the first quarter of 2015 and is conditional, inter alia, on competition clearance.
The disposal group generated approximately £80 million (US$125.3 million) of revenue in 2013 with reported losses before tax, within discontinued operations, of £8 million (US$12.5 million). Approximately 600 employees will transfer across with the business. Gross assets at 27 June 2014 were £36 million(US$56.4 million). The disposal will result in a discontinued non-underlying loss on disposal of approximately £25 million(US$39.1 million).
In addition, Balfour Beatty recently completed the disposal of the German Railroad Tuning Business for £1 million (US$1.56 million), broadly equating to net asset value. Discussions with potential buyers for the remaining parts of the German and Italian rail businesses are ongoing.