APPENDIX 9
PRIVATISATION OF THE ROLLING STOCK LEASING
COMPANIES (PAC 97-98/342)
Supplementary Memorandum from SG Hambros
You will recall that the Committee referred
to evidence that the potential sale proceeds for the ROSCOs were
at one time said to be £1 billion each and at another time
£2 billion for all three. In my reply to question no. 287
I said that Hambros had not given indications of the expected
sale proceeds on behalf of the Department. I suggested that the
evidence probably referred to discussions about figures appearing
in the press, and I quoted some figures from memory. We have now
been able to review press coverage between October 1994 and the
sale announcement in November 1995, and think the results of this
review might be of interest to the Committee.
The press coverage reflected changing perceptions
of the value of the ROSCOs as the sale proceeded and as important
decisions, with effects on value, were made in relation to such
matters as lease rentals, a pre-sale dividend, mandatory modifications,
efficiency gains in maintenance, government underpinning etc.
For example, in October 1994 the Sunday Telegraph
and the Times reported that the ROSCO sales were "expected
to raise between £2bn and £4bn". In November 1994
the Independent said that the three ROSCOs were "valued at
around £1 billion each".
By February 1995 the Daily Telegraph referred
to "some estimates valuing them together at £2 billion".
The following month the Financial Times referred to "an expected
combined value of more than £1 billion".
Between April and August 1995 reports in the
Times, Independent and Daily Telegraph referred to a range of
values around £2 billion.
As the withdrawal of some bidders became known
the Independent reduced its estimates from "up to £2
billion" in May 1995 to £1.8 billion and "around
£500 million each" in October.
SG Hambros
23 June 1998
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