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Sir Michael Fay and David Richwhite will bank between £55 million and £60 million ($142.6 million to $155.5 million) from the sale of their shares in Britain's biggest railfreight company, days after paying $20 million to settle the Tranz Rail insider trading case.
The pair's Geneva investment bank,
Fay Richwhite, owns 16.6 per cent of English, Welsh and Scottish Railway Ltd (EWS) and has agreed to sell it to Germany's state-owned rail giant Deutsche Bahn. It is understood the pair had been working towards a sale for 10 years.
Financial market sources say Deutsche Bahn has agreed to pay between £300 million and £350 million for EWS, which has about 70 per cent of the British railfreight market and runs about 8000 services a week. Its annual turnover is just over £500 million.
Deutsche Bahn chief executive Hartmut Mehdorn would not reveal how much his company paid for 100 per cent of EWS, but he has said the money came from the company's half-share of last week's £1 billion sale of the Scandlines Baltic ferry business.
The windfall comes two weeks after Fay and Richwhite were criticised in Parliament for their role in the Tranz Rail insider trading case.
Last week, their Midavia Rail Investments agreed to pay $20 million compensation in what Securities Commission chairwoman Jane Diplock said was Australasia's biggest insider trading settlement. Neither has admitted liability.
Labour MP Shane Jones told Parliament that Fay should lose his knighthood and Diplock should be honoured.
Fay, a former America's Cup challenger, has been supporting Team New Zealand in Valencia this month.
Transport sources say Fay, Richwhite and the other shareholders sold EWS on a rising market.
Fay Richwhite, which moved to Geneva in the 90s to focus on rail infrastructure, and other shareholders have been locked in talks with Deutsche Bahn for two months.
EWS has built up a dominant position in its home market since it was privatised from British Rail in 1966 and its shareholders embarked on a big programme of capital spending.
In partnership with three other shareholders - Canadian National Railways with 31 per cent, Boston-based Berkshire Partners with 16.8 per cent and Goldman Sachs with 5.8 per cent - Fay Richwhite spent at least £500 million on turning EWS into a high-speed service.
They also opened up freight routes into France and Europe that made the company attractive to Deutsche Bahn.
"The purchase of EWS will fill gaps in our network," said Deutsche Bahn's head of logistics, Norbert Bensel.
EWS, which also supplies locomotives and drivers for the royal train to move the Queen and other members of the royal household around Britain, has increasingly specialised in wagon-based deliveries for the automotive industry and bulk goods such as coal and stone.
EWS's owners also started services to France through its Euro Cargo Rail subsidiary, which started operations in late 2005 and now runs 30 trains a day.
