A German rail company, Deutsche Bahn, has reportedly expressed interest in acquiring a majority stake in Eesti Raudtee (Estonian Railway), while current owners of the stake vowed to fight a 100,000 euro penalty for non-compliance of investment obligations.
TALLINN - The German business newspaper WirtschaftsWoche reported last week that Baltic Rail Service, which owns 66 percent of Estonian Railway, was asking 150 's 170 million euros for the stake and that Deutsche Bahn was on an acquisition spree despite its limited funds. The state-owned company recently acquired the U.S. logistics firm Bax Global for 943 million euros.
According to the German paper, other shortlisted bidders for Estonian Railway holding were a group of Russian investors and another group of Estonian entrepreneurs.
Previously only VR, Finland's national railway, had shown an interest in its Estonian counterpart.
Baltic Rail Service in December announced its intention to sell its stake after having controlled Estonian Railway, which owns the infrastructure and is also a cargo operator, for nearly five years. Executives expressed enormous frustration at the current government, in particular Economy Minister Edgar Savisaar, saying that politics had forced the company into an impossible situation.
After a short lull, intrigue around the standoff returned to the headlines last week after Edward Burkhardt, chairman of BRS, claimed that the director of Russia's Severstaltrans had tried to persuade the company to sell its sake to the Estonian government.
"He said the state was the only potential buyer and that we should accept the state's offer," Burkhardt told the Eesti Paevaleht daily. He said he told Severstaltrans chief, Andrei Filatov, that the state's offer was too low.
In Burkhardt's opinion, both Filatov and Savisaar are "in the same boat." "But that doesn't surprise me," he added.
Government officials lashed out at the claim. "It's total rubbish," Heido Vitsur, adviser to the economy minister, said. "Burkhardt maintained his business was doing very well until the present government of Estonia, which he claims is run from the East took office. Actually, the railway legislation was already drawn up by the previous government."
Burkhardt said he was not surprised that Severstaltrans' Estonian subsidiary, Spacecom, was not interested in buying the stake, since it made more sense to remain an operator and pay the state-established fees. He suggested that the interest of Severstaltrans and Spacecom could be having BRS sell the majority shares back to the state so that the state could subsidize the railway infrastructure using taxpayer's money and enable Spacecom trains to continue operating on the railway at reduced fees.
Burkhard said it was terrible to watch the Estonian government act in the interests of oil transit. BRS has asked 2.5 's 2.6 billion kroons for its interest in Estonian Railway, while the state is prepared to pay 2.1-2.2 billion. Negotiations between the sides have ceased.
In the meantime, BRS said it would take the government's fine of 15 million kroons (96,000 euros) to court. "We knew the government was preparing that penalty and have repeatedly submitted thorough financial and legal justifications, which the government has ignored. The natural further course of affairs is that the penalty debate will be settled in court," said Juri Kao, member of BRS' supervisory council. Kao said the claim was groundless and was created to obstruct a sale of the Estonian Railway.
