pounds 3m for Amey Rail `fat cats'

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The Independent Online
Five employees of Amey Railways, one of Railtrack's main contractors, yesterday emerged as the latest rail "fat cats".

The former British Rail employees stand to make a profit of more than pounds 3m by selling their 25 per cent stake in Amey Railways just 16 months after the business was privatised, to Amey, the construction group that already owns the remaining shares in the business.

Peter Forbes, who led the management buyout of the stake in the rail business, will make more than pounds 1m for the deal. The five employees paid around pounds 250,000 for the quarter share of the business Amey is buying back for pounds 3.48m.

The latest windfalls follow a long line of controversial bonanzas enjoyed by former British Rail management, the most notorious being the pounds 36m banked by Sandy Anderson from the sale of Porterbrook train leasing group to Stagecoach.

Having secured his windfall, Mr Forbes has resigned as deputy chairman of Amey Railways and as a board director of Amey. He will receive no compensation for leaving his job but will remain as a consultant to the group until the end of the end of 1999 on an undisclosed salary.

Neil Ashley, chairman of Amey, yesterday defended the windfalls. "This pay-off is much less than some other deals with leasing companies. The business is going well and we chose to exercise our option to buy back the minority stake."

Analysts believe that Amey has struck a bargain deal. The group and its management bought Amey Railways for just pounds 15m in April last year and it made a profit of pounds 5.4m in the nine months to last December.

Separately, however, Jarvis, another rail contractor, suffered a setback yesterday when its pounds 64m rights issue to fund the acquisition of Fastline and Relayfast, two track renewal companies, was spurned by investors. Less than 15 per cent of shareholders took up the rights, leaving underwriters with millions of unwanted shares.

Jarvis' share price has plummeted below the rights price of 255p a share on negative comment in the City.

The shares slipped another 4p to 232p yesterday compared to the pre-rights price of 308.5p in June. A Jarvis spokesman said its problems had been exaggerated.

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