The bids are in for French road network

22nd August 2005, Comments 0 comments

PARIS, Aug 23 (AFP) - The French finance ministry said Monday it has received 18 offers to buy the nation's network of toll highways.

PARIS, Aug 23 (AFP) - The French finance ministry said Monday it has received 18 offers to buy the nation's network of toll highways.

"Eighteen industrial and financial investors, both French and foreign, have made indicative offers for one or several of the (highway-operating) companies," the ministry said in a statement.

The offers are non-binding, and the government will later request firm offers and finalise its choice by the autumn, Finance Minister Thierry Breton has said.

The privatisation of France's motorways, the longest and among the best-maintained in the Europe Union, begun in the early 1990s, has stirred opposition from across the political spectrum, including from within the governing centre-right UMP party.

The cash will be used to pay down some of the country's substantial national debt and to finance new transport infrastructure projects.

This week's 18 bids are being taken as evidence that the EUR 11bn (US $13bn) price tag for the three holding companies is too low, according to opponents of the action.

The French finance ministry said it was pleased by the "high" number of bids for a 50.3 percent stake in Autoroutes du Sud de la France (ASF), 70 percent stake in Autoroutes Paris-Rhin-Rhône (APRR) and 75 percent stake in the Société des Autoroutes du Nord et de l'Est de la France (SANEF).

French and Spanish transport and construction companies were heavily represented among the bidders, and the high number of offers meant the government would be likely to meet its objective of raising between EUR 10bn and EUR 12bn, said analysts.

"The fact that there are 18 investors is a very good thing for the targets," said Xavier de Champsavins, an investment manager at Meeschaert.

The price of shares in each of the partially privatised companies increased on the Paris stock exchange on Tuesday morning. APRR gained 2.23 percent to EUR 52.80, ASF was 0.76 percent higher at EUR 49.37 and SANEF was up 0.95 percent at EUR 48.66. Meanwhile, the CAC 40 index was down 0.85 percent at 4,447.8 points.

The government plans to use the revenue from the sale of its remaining stakes in the companies to pay down the national debt and to invest in other infrastructure projects.

The final price will depend upon the binding offers submitted by the companies. The government said it would choose according to the price, strategy, labour impact and public service guarantees proposed by each candidate.

Opposition to the privatisation process has grown in France's political class during the last few months, led by the leader of the opposition UDF party, François Bayrou.

A member of his party, Maurice Leroy, savaged the government's plans on television on Tuesday morning. Using an oft-heard criticism of privatisations in France, he accused the government of "flogging the family silver".

"I'm not surprised there are a lot of candidates to buy the motorway companies, notably from Spain or overseas, because it'll be very lucrative for them," he said during an interview on French television channel France 2.

He said the target of EUR 11bn made the privatisation process a "fire sale" and called on Prime Minister Dominique de Villepin to reverse the decision.

Elsewhere, the head of France's parliamentary economic affairs commission, Patrick Ollier, said he opposed foreign companies taking majority stakes in the soon-to-be privatised companies.

"I want the capital of these companies to stay French in their majority,"  Ollier said in an interview with the daily Les Echos.

Separately, the parliamentary spokesman on public finances for the governing UMP party, Herve Mariton, said he wants the outcome of the government's sale of the operators to be "the most French possible."

Companies that have declared their bids by the close of Monday's deadline included Italian motorway operator Autostrade, French construction companies Vinci and Eiffage, and a number of Spanish companies.

Autostrade joined a French consortium bidding for the stake in APRR that groups state-owned Caisse des Dépôts et des Consignations (CDC), AGF, AXA and Crédit Agricole.

That bid will be pitted against one by Eiffage and its Australian partner Macquarie.

Vinci was also reported to have confirmed it was bidding for overall control of ASF, in which it already has a minority stake.

Meanwhile in Madrid, three Spanish companies -- Sacyr Vallehermoso, Abertis Infraestructuras and Fomento de Construcciones y Contratas -- said they were participating in the privatisation, confirming earlier press reports.

A spokesperson from Sacyr Vallehermoso said that its Itinere unit had lodged bids for APRR and Sanef.

The French finance ministry declined to name any of the candidates, but said its success in attracting 18 candidates was thanks to its "open and transparent" auction method.

Copyright AFP

Subject: French news, privatisation, French roadways, APRR, ASF, SANEF, Autostrade

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