Banking group HSBC has started the sale of its rail unit – HSBC Rail – for which it is said to be seeking around £2 billion (€2.3 billion; $3 billion), a source close to the process told InfrastructureInvestor.
HSBC Rail: Not a
“HSBC Rail is not one of the bank’s core businesses,” offers the source, “but the reason they have now re-started the sale is because they feel it is the right time to get a right price. This is not a fire sale, as this is an asset with a very strong performance,” he added.
The bank is said to be looking to fetch as much as £2 billion, according to several reports. Reuters is saying a £1.7 billion staple package is in place, which includes £200 million for capex. JP Morgan, Macquarie and UK-based investment firm Star Capital are all thought to be looking at the deal. Teasers for the deal are already out with interested parties to receive information memorandums in one or two weeks, another source said. Expressions of interestn are expected in late March, Reuters reports.
A spokesman from HSBC did not wish to comment on the reports. Star Capital confirmed its interest in the asset but did not wish to comment on the sales process itself. JP Morgan and Macquarie could not be reached for comment.
UK rolling stock companies have proved popular with investors due to their long-term contracts and steady cashflows. In June 2008, Royal Bank of Scotland sold its rolling stock leasing firm, Angel Trains, to Australian investor Babcock & Brown, now Arcus Infrastructure, for about £3.6 billion.
Later that year, Deutsche Bank, Lloyds and Antin Infrastructure – the infrastructure fund sponsored by French bank BNP Paribas – paid £2 billion for Porterbrook, Abbey National’s rolling stock firm. Abbey National is now part of Spanish bank Santander.