Mobilicités : The current CEO of Caisse des Dépôts, Augustin de Romanet, recently said he rejects any industrial operator to take over Veolia Environnement shares in Veolia Transdev. Why is that ?Jérôme Gallot : There are several explanations for not looking for an industrial partner. First, it would create a competition and a dominant position problem if the operator is French. Regarding foreign operators, there is also a problem of competition, and they would perhaps not be favorably welcomed by French local transport authorities. Third reason, not the least, Veolia Transdev is an industrial operator itself, this could create an additional problem if we look for an industrial partner.
At what stage is the operation ?Immediately after the announcements of divestment on December 6, 2011
(read previous article), Veolia Environnement started looking for candidates. Several large investment funds have shown an interest. We are currently in an reiterated process with these big funds, they will submit non engaging offers in the coming weeks.
Before March 7 when Augustin de Romanet will leave Caisse des dépôts (CDC) ?It is difficult at this stage to say whether the operation can be completed before March 7. But it is likely that the departure of Augustin de Romanet at the head of the CDC may unfortunately slow down the whole process.
Veolia Transdev shareholders is a very important issue for the CDC, and it is likely that this type of decision needs to be taken by a general manager fully in charge.
Will you wait until the withdrawal of Veolia to rename the group ? Couldn't it simply be Transdev ?We want to go quickly on this matter, and all options are open. We are working on a new logo and a new name. We might be ready during the first part of 2012.
You say you have several contacts with potential investors. Let's remember how difficult it has been for Keolis to stabilize its shareholders and to find long term partners. Are you more optimistic for Veolia Transdev ?I will not compare the two operations because I do not know exactly what happened with Keolis. Again, a number of investors have contacted us showing an interest in our company. I used to work in private equity before and I know from experience that this process takes time, especially when it comes to a company of nearly 120 000 people, in 27 countries. We should not reasonably expect any decision regarding ownership within the next few weeks. A solution before March 7 is very unlikely.
Public transport is a sector with low profitabilty, this is an additional handicap for selling Veolia shares, isn't it ?This sector has indeed a limited profitability and must be assessed over the long term. Which may limit the number of candidates. But experience shows that the sector can attract investors. One can imagine that short-term and immediate profitability "coups" in the finance sector, are behind us. Our business has good development prospects, in several countries where we operate, this growth exceeds 5% per year.
Comments were pretty harsh when Antoine Frérot announced Veolia Environnement withdrawal from Veolia Transdev. Some former executives of Transdev took the opportunity to criticize the merger itself. What was the feeling amongst the employees ?Let's not mix two different issues : ownership and business strategy. I think some observers did not understand the logic of the merger, or were strongly opposed to it and took the opportunity to pin it up when Veolia announced its withdrawal.
We are customer-focused, looking for performance, not to the past. During the last quarter of 2011, we won three billion euros contracts. The merger launched in 2010 is now behind us with its industrial logic. We are building a group both global and local.
The fact that CDC recently announced that it will keep at least 50% of Veolia Transdev capital is something new and a major information. This is very reassuring for the group employees. CDC is a very structured shareholder, very close to local authorities, this is a guarantee of stability for the company and its employees.
At last, CDC said it would agree to participate in a capital increase which I think is necessary for the development of our company. This is very encouraging and a good base for the future following Veolia Environment divestment, total or partly.
Total or partly ?Veolia Environnement may either divest all at once if it finds someone to buy it 50% shares. Either partly or gradually, especially if it does not take part in the capital increase because it would dilute its share.
Is this capital increase decided ?Not yet but it seems necessary given the level of Veolia Transdev debt. It is also necessary to finance our development and ambitions of the medium-term strategic plan adopted by the shareholders late 2011.
In April 2011, you said the group would withdraw from some countries, according to Veolia Environnement's strategy, have you started and will it be confirmed after the final exit of Veolia Environnement ?What I exactly said was that we adopt a mobility strategy. The idea is to develop in countries where we are already implemented or in areas such as Asia where we have an opportunist strategy, shortening the sail in other countries.
RATP Dev managers recently said they were very interested to take over the 50/50% joint venture you have in Asia. Will you sell your shares in the jv ?RATP Dev actually reserve the right to use a specific clause in the joint venture contract. This clause, related to a change of ownership, is currently being thoroughly examined by our legal department with regard to the fact that there had been a significant change of ownership (merger Veolia Transdev ed) since the creation of this joint venture.
But what about the reality of the partnership, and what do the two partners want to do ? As far as I am concerned, I want Veolia Transdev to stay a public transport operator in Asia. That goes beyond the strict legal framework
(read RATP CEO Pierre Mongin reaction on the same topic - in French).
Interview by Robert Viennet and Nathalie Arensonas 
