Porterbrook owners considering sale

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Porterbrook owners considering sale

Porterbrook, one of the three main rolling stock companies that own Britain's trains, could be put up for sale in a deal that could fetch more than £2 billion for its shareholders.

Shareholder of the company include Deutsche Bank, iCON Infrastructure, Antin Infrastructure Partners and OPTrust. Lloyds TSB was also a shareholder but it exited the consortium in October 2010.

In a statement on its website on Friday, Porterbrook said:
"The ultimate shareholders of Porterbrook have informed the company that they are exploring options for their investment in the company and its associated companies, which include a possible sale of their interests."A further announcement will be made in due course, as appropriate."

Porterbrook refinanced its debts last month, raising £1.2 billion, through:

  • a 5-year senior term loan of £300m together with the new 15-year £250m fixed rate public bond which were used to repay existing debt due to mature in 2016;
  • 5-year revolving capex and acquisition facilities totalling £600m, which along with the senior term loan are provided by a syndicate of 12 banks; and
  • a new 7-year junior facility of £100m which is provided by MetLife and a number of European financial institutions.

The sale is poised to create controversy over the sector due to the existence of only two competitors: Angel Trains and Eversholt.

In 2009, a Competition Commission concluded that competition in the market for the leasing of rolling stock was restricted by the limited number of alternative fleets available.

Porterbrook's investment to date in the UK rail markets totals to £2 billion in new trains and over £300 million on existing fleet refurbishment.

Several days ago, we announced that Pamplona Capital Management LLP has announced that it has signed a definitive purchase agreement to acquire Beacon Rail Leasing, a UK locomotive and rolling stock leasing company from BTMU Capital Corporation, a subsidiary of Mitsubishi UFJ Financial Group.

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