Red Star shines on British Bus
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by Karen Miles • British Bus is emerging as a front runner to buy Red Star. The company admitted this week it is interested but added that it is resisting government pressure to finalise a deal.
Red Star staff are calling on British Rail to end months of uncertainty by naming the new owner. The demand for clarification from the RMT rail union comes as BR looks set to fail to name Red Star's new parent by the end of March, as it had earlier pledged.
The papers authorising BR's choice of new owner remain with the Department of Transport awaiting approval; terms and conditions of the sale are still being settled.
BR has ruled out a management buy-out. British Bus is believed to have beaten the other two contenders: consortiums Security Dispatch and Caledonian London Enterprises.
British Bus is one of the largest private bus companies to emerge since bus privatisation in the 1980s. It has just bought Caldaire, the Yorkshire bus group.
BR will not comment on reports that the new owner will pay £1 for the equity of the company, in exchange for taking on its debts. In 1992/93 Red Star lost £9m on a £46m turnover.
An announcement will end over 20 months of uncertainty for Red Star's 700 employees—down from 1,200 after a cost-cutting exercise carried out to make the privatisation more tempting to potential buyers.