Railtrack fury over '£1 a share'

RAILTRACK shareholders were today fuming over the latest plan outlined for their company by Transport Secretary Stephen Byers, saying they now believed they would recover less than £1 a share from the controversial restructure.

Simon Haslam, chairman of the Railtrack Shareholders Action Group, said Tuesday's statement by Byers left little doubt that Railtrack's substantial property assets would remain with the regulated business, dashing initial hopes they would be available to shareholders.

He said it was also apparent that Byers would assign a value to the Channel Tunnel Rail Link that was 'well under half' of the £400m worth put on it by the company, and that he had no intention of compensating shareholders with interest-bearing bonds, as widely speculated.

Government sources confirmed that 'the majority of the property assets would remain with the Plc', meaning they would be unavailable to shareholders. The only money shareholders seem certain to get is the £370m on deposit with HSBC, worth about 80p a share, and possibly the proceeds from some minor property assets.

'If you put all that together in its most favourable way you are struggling to get more than £1 a share,' Haslam said. 'This really is a renationalisation and we must make sure the Government is not allowed to get away with it.'

Railtrack shares were trading at 280p before the administrator was appointed earlier this month. Chief executive Steve Marshall has set a target of recovering 360p.

'Byers does not understand how interconnected the City is,' Haslam said. 'The people he is screwing on the Railtrack side are the same people he will be looking to for the money he needs to do these new deals he wants to do.' He said the action group, which is considering legal action against the Government, would request a meeting with the administrators to discuss what could be recovered.

Haslam's comments came amid growing fears that the Government will be forced to extend the £800m bridging loan it has already made to keep Railtrack solvent since the administrators'appointment.

The Government has insisted the additional working capital was a loan rather than a grant. But Railtrack sources said there was increasing speculation that the Government would have to write it off in order to put Newtrack on a stronger financial footing.