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DB plans part-privatisation of Arriva and Schenker businesses

05 May 2016

GERMANY: Following an extraordinary meeting held in Berlin on May 4, the Supervisory Board of Deutsche Bahn AG has instructed the Management Board to develop to an implementation plan that would allow third parties to take a minority shareholding in the DB Arriva and DB Schenker businesses. ‘A final decision on the matter’ is planned for this autumn.

‘If we don't take action, the group's debt will increase substantially by 2020’, said DB Supervisory Board Chairman Professor Utz-Hellmuth Felcht. ‘A third-party equity interest limits the level of debt and creates the financial scope necessary to continue the quality and investment campaign in Germany.’

Of the €55bn that DB Group is planning to invest in 2016-20, €50bn or 90% will go towards rail operations in Germany. Much of the infrastructure spending will be funded by the federal government, but DB Group expects to finance €20bn of the total investment itself.

‘Our express intention is for DB Arriva and DB Schenker to continue to be fully consolidated in DB's balance sheet’, insisted Management Board Chairman Dr Rüdiger Grube.

As part of the restructuring of DB Group, the Supervisory Board has also decided to dissolve the two-tiered holding structure of DB AG and DB Mobility Logistics AG, with the two entities to be merged. Applied retrospectively to the balance sheet as of January 1 2016, this reflects the fact that the Mobility Logistics IPO cancelled in 2008 ‘due to the financial crisis’ is no longer being pursued.