Investment fund in talks with Luas stakeholder Veolia

A €1 BILLION investment fund based in Luxembourg is in negotiation with French company Veolia Environment in relation to its transport interests, which include a 50 per cent stake in the company that operates the Luas.

The Cube Infrastructure Fund, which has investments across Europe, was identified yesterday as the entity with which Veolia had entered into exclusive talks in relation to its Transdev mass-transit unit.

Veolia, the world’s largest water utility company, is also involved in the environment, energy and transport sectors. It has recently announced its intention to rid itself of assets of up to €5 billion in the coming two years in an effort to refocus its portfolio and to reduce debt.

Chief executive officer Antoine Frerot said a deal to sell its stake in Transdev could be reached “quickly”. Transdev has operations in 28 countries involving light rail, metro, bus and coach transport businesses.

Veolia’s share price jumped by 15 per cent yesterday when it announced it was in exclusive talks over its transport interests.

A spokeswoman for the company in Ireland had no comment to make on the announcement.

Bloomberg subsequently reported Caisse de Depots et Consignations, a French state-owned investment bank that is Veolia’s partner in the Veolia Transdev operation, as saying that French bank, Natixis SA, was the party involved in the exclusive talks.

Natixis manages the Cube Infrastructure Fund on behalf of the fund’s investors. The fund has investments in a range of transport, water and energy companies around Europe, including the Eurotunnel.

The Railway Procurement Agency has a contract with the Irish Transdev subsidiary, Veolia Transport Dublin Light Rail Ltd, for the running of the Luas.

The company’s accounts for 2010 show it made a pre-tax profit of €1.88 million on turnover of €42.2 million.

It had an average of 247 staff during the year.

However the company’s Irish holding company, Veolia Transport Ireland Ltd, reported a pre-tax loss of €13.33 million for 2010.

The loss included a €14.87 million impairment charge arising from a review of the value of its subsidiary undertakings, bringing their value down to €9.1 million.

As well as its Luas operation, Veolia has a second Irish subsidiary, Veolia Transport Ireland Bus Ltd. The company did not trade in 2010.