National Express is planning to give up its 40 per cent shareholding in the loss-making Eurostar train service when a restructuring of the cross-Channel rail operator takes place later this year.
Phil White, the National Express chief executive, told shareholders at yesterday's annual meeting that the Eurostar shareholding was no longer a core business and the transport company intended to sell out.
Eurostar is losing an estimated £100m a year and passenger numbers this year are down by 8 per cent because of intense competition from low-cost airlines on the London to Paris and Brussels routes.
The National Audit Office has now begun a second investigation into Eurostar's prospects amid fears that taxpayers could be left facing a bill of up to £1bn to bail it out.
National Express's 40 per cent stake is in the British arm, Eurostar UK. It acquired the stake in 1998. There are two other Eurostar companies which own the French and Belgian arms of the service. The other shareholders in Eurostar UK are the state-owned French and Belgian railways SNCF and SNCB, each with 25 per cent, and British Airways, which owns 10 per cent.
It is expected that National Express will pass its shareholding to SNCF, which is keen to secure a majority stake in Eurostar UK.
National Express is expected to book a loss of about £3m on its stake this year, compared with a £2m loss last year, and may have to take a sizeable write-down when it withdraws from the business.
Although Eurostar UK is now run by National Express's former commercial director Richard Brown, the company has no involvement in the day-to-day operation of the service. "We have no influence, we are merely a shareholder and that shareholding is not core to the group," said a spokeswoman.
Mr Brown is currently working on the restructuring of Eurostar. The exercise, codenamed Project Jupiter, is due to be completed later this year and will result in Eurostar being run as one integrated company rather than three separate businesses with their own fleets and depots.