LONDON — Shareholders in the collapsed rail infrastructure firm Railtrack PLC will receive payment for their stocks as part of a buyout deal announced Thursday by Railtrack’s parent company, according to a wire service report.
Railtrack Group said investors would receive between 2.45 pounds and 2.55 pounds (dlrs 3.72 and 3.88) per share after the company was dissolved, compared to the 2.80 pounds (dlrs 4.26) each share was worth before the company was forced into administration last year.
Railtrack said it had agreed to accept at 500 million pound (dlrs 760 million) buyout from Network Rail, a private nonprofit firm.
The government announced in October that it was scrapping Railtrack, which has been widely blamed for a series of delays and accidents on Britain’s rail network.
The company, created when the former Conservative government split up and privatized British Rail in the 1990s, will be replaced by Network Rail.
Critics accused Railtrack, which had responsibility for train tracks, signaling and stations, of failing to invest enough money in the system and blamed it for safety problems, including several deadly crashes.
The government’s decision to place the company into administration, or receivership, was applauded by frustrated passengers but left shareholders fearing their Railtrack stocks — once worth as much as 17 pounds (dlrs 26) apiece — would be worthless.
Shareholders will vote on the deal at an extraordinary general meeting on July 23. One representative said Thursday he was not impressed with the offer.
“We shall have to study today’s announcement but we are still very much opposed to the offer and will vote against it at the EGM,” said Andrew Chalklen, chairman of the Railtrack Private Shareholders Action Group.
Railtrack Group said the offer was the shareholders’ best bet.
“The board realizes that the administration order has been detrimental to the interests of shareholders, however…. the board has to be realistic about the options available,” the company said in a statement.
Railtrack said that if shareholders approved the deal, they could expect the first payment in January 2003.
They also are free to sell their shares. Trading — suspended when the company went into administration — resumed Thursday. Shares fell 51 pence to 2.23 pounds (dlrs 3.39) in early trading on the London Stock Exchange.