Red Star Sell-Off Grinds to Halt
Michael Harrison and Mary Fagan, The Independent (London, England)
THE GOVERNMENT'S rail privatisation programme suffered an embarrassing setback yesterday after it was forced to abandon the sale of British Rail's Red Star parcels business because no satisfactory offers were received.
Roger Freeman, Minister for Public Transport, said the BR board was now urgently drawing up a new management plan for the business with the aim of achieving financial viability and a successful sale in 1994.
Red Star employs 1,200 and lost pounds 9m in the last financial year on turnover of pounds 46m. It was put up for sale in June. BR said a number of bids had been received, including one from a management buyout team, but that none f these had proved sufficiently attractive.
Despite the setback over Red Star, the Government announced yesterday that it was pressing ahead with the sale of BR's track maintenance and renewal operations. These employ 33,500 people and have a workload worth pounds 1bn a year. The sale of the business, split into a number of companies, is to be completed by April 1996.
Mr Freeman said he expected the privatisation to take the form of a trade sale rather than a flotation and that management-employee buyouts were unlikely to be favoured. …