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Exclusive: AMP set to buy Angel Trains

The Australian fund manager, which already owns 25% of the rolling stock business, is leading a consortium that has joined up to bid for the whole of the company.

AMP Capital (AMP) is leading and managing a consortium that is set to buy the holding in UK rolling stock lessor Angel Trains being sold by London-based fund manager Arcus Infrastructure Partners (Arcus), people close to the matter told Infrastructure Investor.

The Sydney-headquartered firm, which already owns 25 percent of the business, has a preferred position to acquire the asset by virtue of pre-emptive rights. It has now completed all due diligence and has had its valuation work and business case agreed and finalised, according to a source, who added that AMP is prepared to take on the whole asset “subject to what will be on offer”.

The consortium comprises AMP’s Global Infrastructure Fund and other AMP-managed funds that are existing investors in Angel Trains as well as Abu Dhabi Investment Authority, PensionDanmark, Swiss Life and a large Asian sovereign fund. AMP declined to comment on the deal, while Arcus could not be reached before press time.

AMP is being advised by CMS Cameron McKenna on legal, PriceWaterhouseCoopers on financials and tax, SDG on commercial and technical and Macquarie Capital on acquisition matters.

If completed, the transaction would be the third sale of a large UK rail leasing stock business (ROSCOs) in less than a year. Last January, Hong Kong conglomerate Cheung Kong agreed to pay £2.5 billion (€3.3 billion; $3.8 billion) to a consortium formed of 3i Infrastructure, Morgan Stanley Infrastructure Partners, STAR Capital and its co-investor PGGM for Eversholt Rail, one of the three major players in the sector.

Porterbrook, formerly owned by iCON Infrastructure, Deutsche Bank, Antin Infrastructure Partners and OPTrust, was acquired by Allianz Capital Partners, Alberta Investment Management Corporation, Hastings Funds Management and EDF Invest last October, in a deal estimated at about £2 billion.

Angel Trains is currently owned by a consortium comprising Arcus, AMP and PSP Investments as well as London-listed fund International Public Partnerships and Australian pensions STC Funds Nominee and Prime Super, both advised by Whitehelm Capital. Babcock & Brown, from which Arcus spun out in 2009, led the consortium that initially bought the company from Royal Bank of Scotland in 2008 for £3.6 billion.

Founded in 1994, Angel Trains is billed by some of its shareholders as the largest of the UK’s ROSCOs. The company closed a £1.16 billion refinancing last November, comprising £1.035 billion of senior bank and institutional debt and £125 million of junior institutional liquidity. About £810 million of the proceeds were used to prepay existing senior and junior bank debt, which had maturities of 2016 and 2015 respectively, with the balance earmarked for financing future growth.