Final effort made to save Charterail
Thursday 27 August 1992
Directors of the company are to meet BR executives to seek its support to keep the business going. The decision to ask for the talks with BR was taken at an emergency two-hour board meeting of Charterail directors yesterday evening.
Charterail, formed in 1990 with pounds 3m of privately raised funds, is the first operating joint venture between BR and the private sector. BR is the biggest shareholder with a 22 per cent stake while GKN, the automotive, defence and industrial services group, has a 15 per cent holding.
The company transports freight long distances between railheads on BR track and then distributes goods locally by road. It operates three routes a night to London, Manchester and Glasgow and one of its biggest customers is a supermarket chain. It has ambitious plans to expand its network to include south-west England the north east of Scotland.
Charterail is understood to have encountered problems over the fees levied by BR for the use of its track.
Last night, the company, which is chaired by Ian Hay Davison, chairman of Storehouse and former chief executive of the Lloyd's insurance market, said: 'Despite the difficult state of affairs the directors are confident that it would be possible to continue the business under certain circumstances.
'Since British Rail is the principal shareholder and creditor of Charterail, the directors have asked for an urgent meeting with British Rail to consider these proposals.'
Should the company collapse, it would be a blow to the Government's ambitions of privatising BR. Its Railfreight division would be one of the first contenders for sale.
Roger Freeman, the transport minister who launched Charterail, has been urged to intervene. So has Sir Bob Reid, the BR chairman.
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