Rail Cargo Austria buys Hungary

by Forbes

Rail Cargo Austria has won the tender in the privatisation of Hungarian rail freight business MAV Cargo with a bid of 102.5 bln forint, in line with earlier press reports, government officials announced today.

MAV Cargo, touted as a key logistics asset in the heart of the European Union's fastest growing region, went on the block earlier this year as part of government attempts to reorganize the inefficient rail system.

Rail Cargo Austria, the freight unit of Austrian railways company OBB, secured MAV Cargo in a joint bid with local state-owned rail operator GYSEV.

The consortium fended off rival bids from Slovakia's Slavia Capital, which bid 86 bln, and British-American consortium Cargo Central Europe, which bid 57 bln forint.

The highest bid of 103.16 bln forint from US-Dutch investor New World Resources was disqualified because the company attached conditions to the tender including altering a share agreement for workers, MAV Chairman Miklos Kamaras said.

Economy and Transport Minister Janos Koka said the winning bid was 35 times MAV Cargo's earnings in 2007. He added that the new owners have agreed to sell 5 pct of the stock to workers at half the market price before purchasing it back at full market price.