The Belgian government is proposing a 61 million euro rescue package for Lineas, Europe’s largest private rail freight operator. Without that convertible loan, a loan that can be converted into shares of the company, bankruptcy is looming for the Belgian company.
The loan will be made through SFPIM, the Sovereign Wealth Fund of Belgium. That investment fund previously owned 46% of the former NMBS/SNCB freight transport subsidiary, which was privatized in 2015.
Third capital injection
According to Lineas, the financing enables the company to”face the difficult economic environment of early 2025, characterized by a general decline in volumes in the steel, chemical, and automotive sectors in Europe.”
It is already the third capital injection at Lineas since early 2024. The European investment fund Argos Witty, accounting for 54% of the shares, and SFPIM put 60 million euros on the table at the time. A few months later, Flanders, Wallonia, and two banks provided Lineas with a new 46 million euro bailout. Argos Wityu could not or would not put any more money into the railroad company this time and will therefore be diluted and lose its majority if the loan is converted.
Another €105,9 million needed
Yet this refinancing has not cleared all the dark clouds over the company. According to the federal government, Lieans needs an additional 105.9 million euros in capital in the medium term. To that end, it is actively seeking private investors while, according to the company, the Belgian authorities also remain willing to “consider other forms of strategic support.”
The new CEO of Lineas, Erik van Ockenburg, has developed a recovery plan with the board of directors that is expected to result in a zero operating result by 2026. The plan targets volume growth of 8% in 2026 and 4% in 2027, combined with modest price increases of 1% and 3%, respectively.
The company says it is currently experiencing “strong commercial dynamics” with major new contracts, especially in intermodal transport and chemicals. Operating losses reduced from € 82 million in 2022 to € 13.6 million last year.
Modal shift remains slow
Lineas is the largest user of the 1,000 km of rail tracks in the Port of Antwerp Bruges, but more than 55% of containers leave the port by truck. Despite years of political ambition to shift more freight from road to rail, from about 7% in 2021 to 15% by 2030, that “modal shift” remains slow.
Rail freight is a sector with high fixed costs for locomotives, infrastructure, personnel, and energy, while margins remain structurally small. For companies, moreover, the attractiveness of rail is limited. The timetable, because crowded with passenger trains, leaves little room; waiting times add up quickly, and for small volumes or deliveries that need to get out the door soon, door-to-door transportation by truck is often more practical. This makes it difficult for rail operators to bundle sufficient volumes and operate profitably.
