GERMANY: Deutsche Bahn is looking to float its international public transport operating subsidiary Arriva on the stock market next year, CEO Richard Lutz told local media on December 4.
The state-owned railway holding group had been negotiating a trade sale of Arriva in a bid to shore up its finances and get its borrowing back below the agreed debt limit. However, the disposal process was halted by the DB AG Supervisory Board last month, when it became apparent that none of the reported 10 interested bidders was willing to offer the €3∙5bn to €4bn that DB had been hoping to raise.
In particular, concerns had emerged over the scale of Arriva’s pension liabilities in the UK, valued at more than €400m, and some bidders reportedly wanted the troubled Northern franchise to be excluded from the sale. Following a special Supervisory Board meeting on November 18, DB announced that its Executive Board Member for Finance, Alexander Doll, would be leaving the company at the end of this year
According to Lutz, DB is now looking to float a minority stake in Arriva with an IPO in May 2020, and then offload its remaining shares in further tranches over the next three years. ‘We definitely want to go public next year and then sell in an extended process’, Lutz explained. Meanwhile, he suggested that DB would be looking to raise €3bn through a bond sale in the coming months.