Tuesday, December 30, 2008

Orient Express: in Peru?

I offered two entries to this blog in October that discussed a dispute among shareholders of Orient Express Hotels Ltd.

I mentioned of course that the company operates the railroad for which it is named. What I didn't say at the time (because I wasn't aware of it) was that it also operates rail service to Machu Picchu, the great Peruvian/Andean archeological site and tourist attraction.

Now the government of Peru has indicated that it wants to withdraw the company's concession for that trip -- or, at least, withdraw the monopoly right, and stimulate competition in order to bring down fares and encourage more tourism.

Meanwhile, the Swiss finance firm Reyl & Cie, which owns around 8% of the equity of Orient Express, expressed great confidence in the firm's long-term profitability, despiute a recent stock price slide.

Reuters is quoting Francois Reyl, chief executive of Reyl & Cie, thus: "We are long time players. There is great value embedded in this company."

Reyl said nothing about the Peru situation specifically. He said, though: "The stock has been penalized by fighting between shareholders over the legal structure of the company. We are confident that, over time, these types of squabbles will recede."

Those types of squabbles are of course what first caught my attention this autumn.

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