Flanders and Wallonia to invest in ailing Lineas

Rail freight company Lineas is getting a new 46 million euro bailout. It is striking that the regional governments in Flanders and Wallonia are now also going to help save the company, reports the business newspaper De Tijd.

Earlier, the federal government supported Lineas financially twice. The company, the largest private rail freight operator in Europe, is owned by federal private equity company SFPIM (45%) and French investment fund Argos Wityu (55%).

The company has been struggling for some time and is looking to raise additional capital. In the meantime, it needs a bridging loan of several tens of millions of euros.

Operating loss of €40 million

Despite the 60 million euro investment made in January by the company’s two major shareholders, the Flemish and Walloon governments are now offering support.

The Flemish government, via its investments branch PMV, is taking the largest share with 17,5 million euros. The Walloon government is providing 8 million euros through Wallonie Entreprendre. In addition, the banks KBC and Belfius together contribute 20 million euros, half of which is guaranteed by SFPIM and Argos, writes De Tijd.

Last year, Lineas, which continues to search for a strategic partner, had an operating loss of almost 40 million euros.

Important for the port of Antwerp-Bruges

Lineas, the former and 2015 privatized freight division of the national railway company NMBS/SNCB, has 2,100 employees and is important to petrochemical companies in the port of Antwerp-Bruges, among others.

According to Lineas top executive Bernard Gustin, passenger transport is systematically prioritized in many countries, making it difficult for rail freight to develop further. Moreover, for international freight shipments, Lineas depends on rail freight companies that are also competitors and, therefore, foreclose access to their infrastructure, which does not make the task any easier.

The ambition of the Belgian rail freight plan is to double the volume of goods transported by rail by 2030 and increase the rail share in total freight transport to 20% by 2040. In 2022, this was just under 12%.

In 2023, freight transport by train in Belgium fell for the second year in a row. At 53,5 million tonnes, rail freight transport is at its lowest level in seven years.