At the end of December, Eltel has signed a letter of intent to divest its Danish rail operations to Strukton Rail A/S. Under the letter of intent, the parties aim to finalise the definitive transaction by 31 January 2018.
Eltel’s rail operations in the Danish market mainly consist of a maintenance contract for signalling, track and catenary services for Sund & Bælt A/S. The contract is valid until March 2019 with a one-year prolongation option.
The contemplated transaction, comprising the maintenance contract with Sund & Bælt A/S, 26 employees and operational equipment used for delivering the relevant maintenance services, will have a negative EBITA effect estimated to DKK 7.7 million (EUR 1 million) and a negative cash flow effect of DKK 18 million (EUR 2.4 million), expected to occur in thefourth quarter 2017 and first quarter 2018, Eltel explains.
At the beginning of 2017, Eltel decided that its strategic focus will be on the Group’s core businesses in Power and Communication with the geographical markets being in the Nordics, Poland and Germany. Eltel’s rail operations, classified as non-core operations, cover the Nordics countries. In November 2017, Eltel signed an agreement to sell its Finnish rail business operations to Graniittirakennus Kallio Oy and the divestment process of Eltel’s rail operations in Sweden and Norway is still ongoing.
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