Wed, 23 Jun 2010 | BUSINESS SALE
Assets to be disposed of by the coalition government include the High Speed 1 rail link, Tote, the national bookmaker, air traffic control and the Student Loan Company.
The sales will help to generate funds to begin replenishing Britain's empty coffers. The 68-mile London to Folkestone high speed rail link, which cost £5bn to build, is thought likely to fetch £1.5bn at auction for a 30-year concession to run the line and stations.
Transport Secretary Philip Hammond said of the sale: "The money generated by this sale will make an early significant contribution to the crucial task of reducing the public sector debt."
The state owns a 49 per cent holding in NATS, the air traffic controller, which is believed to be worth about £1.5bn in a sale. Employees and a consortium of seven airlines own the rest of the business. Consortium boss Peter Read expects the government will keep a 25 per cent share if it is privatised.
The Tote was given the value of £300m in 2008 when the previous Prime Minister, Gordon Brown, weighed up the idea of selling the bookmaker.
The student loan book was reportedly worth around £18bn in 2009. It will be considered an attractive asset for buyers, who would expect to make a profit from repayments from graduates in years to come. The previous government passed legislation to allow it to sell the asset back in July 2008 and has been under consideration since. The Student Loans Company lent over £5 billion last year, up nearly 20 per cent on the previous year.
Insiders are of the opinion that the government's timing for the asset sell-off could be better, considering the market changeability around the Eurozone's sovereign debt problems.
Neil Vickers of Denton Wilde Sapte voiced a concern for the price that would be achieved through the sales: "The M&A market's in a downturn as well as the rest of the economy, so that does usually affect prices, unless one of those assets is of particular interest to a buying party."
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