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Spain to split state-run rail operator

Source: Bloomberg - Wed 27th Nov 2013
Spain to split state-run rail operator

Spain intends to fragment up its state railway operator to clear about 13 Bln of the company's debt from the public balance sheet.

Administrador de Infraestructuras Ferroviarias, known as Adif, will split off the unit that manages Spain's high-speed rail lines, chairman Gonzalo Ferre told the Spanish Senate in Madrid today. The new company, to be called Adif Nuevos Desarrollos, will sell about 2.8 Bln of bonds next year, bringing its debt to about 13 Bln, Ferre said.

The high-speed rail debt, equivalent to more than 1% of GDP, won't be included in the government's liabilities following the break-up because about 60% of its revenue will come from commercial activities, Ferre said.

Spain's public borrowing is set to exceed 100% of GDP in 2015 after tax revenue plummeted during a 5-year economic slump.