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The government of Estonia and Baltic Rail Services
(BRS), the investor group
that privatised Estonian Railways in 2001 through the purchase of 66% of its shares finalized today the transfer of ownership of the company back to the government of Estonia with the price of 150 million euros and settlement of ongoing disputes between parties. As a part of the settlement, dividends in the net amount of approximately 10 million Euros were also paid to BRS. During the five years of BRS ownership Estonian
Railways improved its safety
record, traffic levels and overall efficiency of the company. The entire fleet of locomotives was replaced, and BRS heavily invested in upgrading of Estonian Railways' infrastructure. However, the relations between the government and the new owners became tense after the application of new Railway Act in 2003 and other actions that favored Russian train operators use of railway infrastructure and was seen by BRS as a breach of privatization agreement. The State and BRS initiated a number of disputes
against each other, with
BRS ans its shareholders seeking action against the State at the International Centre for the Settlement of Investment Disputes in Washington and the arbitration at the Stockholm Chamber of Commerce. The Estonian government for its part took several steps toward re-nationalisation of the company, which eventually led to a negotiated agreement between the BRS and the government to repurchase the railway's controlling interest. 66 per cent of the shares of Estonian Railways was
sold to BRS in August
2001 for approximately 65 million Euros. Investors in BRS include Ganiger Invest (Estonia), AIG Emerging Europe Infrastructure Fund, Rail World Inc. (USA), Jarvis International (UK) and Railroad Development Corporation (USA). Ganiger is an Estonian company formed for the
purpose of acquiring shares in
Estonian Railways. Rail World is an international railway investment, management and operating company (railworld-inc.com). AIG Emerging Europe Infrastructure Fund is a private equity fund investing in Central Europe, advised by Mid Europa Partners on behalf of EMP Global (mideuropa.com). Railroad Development Corporation is an international railway investment, management and operating company (rrdc.com). Note: this a press release by the Baltic Rail Services. Considering it very clearly written, complete and interesting, coming from a source worth our trust, we publish it without any modification. Please take in count that's one point of view (even if very moderately expressed in a line): the counterpart could have a different one. |