A strategic problem for Ferrovial

Heathrow FerrovialPassengers at Heathrow's Terminal 5.

Banc Sabadell | Ferrovial is preparing, together with the French company SNCF, an offer for one of the high speed rail operator licences in Spain. In this way Ferrovial will compete with Renfe from December 2020.

According to the same sources, Adif will select the two companies which will offer passenger AVE services in competition with Renfe in the middle of December. The deadline for presenting offers is 31 October.

Difficult to evaluate without any value being provided, which in any case seems limited to around 500 M€ even if it depends on the purchase packages (up to 3, A, B and C and this estimate would be for one). We do not believe that this business fits well with Ferrovial´s strategy. Despite the proximate cash income from the sale of its services division (estimated at between 2.0 and 2.5 Bn€), we think that the priorities for allocation of resources will remain motorway concessions (green field), debt reduction and shareholder remuneration.

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