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Borealis, OTPP mull HS1 sale six years after £2.1bn deal

The Canadian pensions are undertaking a ‘strategic review’ of the high-speed rail line for which they paid £2.1bn in November 2010.

Canadian infrastructure investor Borealis and the Ontario Teachers’ Pension Plan are considering selling their ownership of the HS1 concession following a series of inquiries from investors.

The pair announced they will be carrying out a “strategic review” of their ownership after what it described as “a number of investment inquiries” for the UK’s only operating high-speed rail link.

They cautioned that there is no set timetable for the review and that they could even come to a conclusion not to sell. A financial adviser is set to be appointed in due course.
A source told Infrastructure Investor that while the two parties are happy with the asset and how it is performing, they have “a fiduciary duty” to analyse the offers they have received.

Borealis and OTPP paid £2.1 billion ($2.6 billion; €2.5 billion) in 2010 for the 30-year concession for the rail link between London and the Channel Tunnel. A £1.6 billion refinancing was secured in 2013 through a combination of bonds, a US private placement and a new banking facility.

HS1’s 2015/16 annual report released in July revealed a 1.8 percent traffic number increase to 75,270 trains, a fall in net income from £11.6 million to £1.6 million profit and an EBITDA of £180.5 million.