Italian railways declared preferred investor in sale of Greek railways

Italian railway company Ferrovie Dello Stato Italiane S.p.A was formally declared on Thursday to be the preferred investor for the sale of Greek railways operator TrainOSE, Greece's privatization fund announced.

The board of directors of the Hellenic Republic Asset Development Fund (HRADF) approved the binding offer for the acquisition of a 100 percent stake in TrainOSE submitted by the Italian railways last week.

Ferrovie Dello Stato Italiane S.p.A, the third largest railway company in Europe, was the sole bidder in the last phase of the international tender launched earlier this year.

The amount of the offer price is 45 million euros (50 million U.S. dollars), according to the fund's press release.

"The HRADF is completing a process that began three years ago. The privatization of TrainOSE secures not only the viability of TrainOSE, but more importantly, its further development. Furthermore, this is an important milestone that lays the foundations for the successful closure of the European Commission state aid dossier on the debt that TrainOSE owes to OSE, which amounts to more than 700 million euros," the press release added.

Following the green light by HRADF, the transaction is subject to final approval by the authorities.

The completion of the privatization of Greece's railways after several delays in recent years was expected to open the way for the sale of the railway carriage maintenance company ROSCO.

The latest international tender on the sale of ROSCO closed on July 6 with no interest expressed by investors. The first international tender for TrainOSE last year had also ended inconclusively.

Greece intends to raise at least 2.5 billion euros from its privatization program this year as part of efforts to restore the growth of the ailing Greek economy. (1 euro=1.11 U.S. dollars) Endit