(Alliance News) - HICL Infrastructure PLC on Friday said it has bought a minority equity stake in Cross London Trains for an undisclosed amount.
HICL is a London-based infrastructure investment firm. Cross London Trains is a public private partnership that owns the Thameslink passenger rail route which covers the North-South London commuter rail corridor and serves both Luton and Gatwick airports.
Following completion of the acquisition, which is expected to be in third quarter of 2022, Cross London Trains will represent around 3% of HICL's portfolio by value.
HICL said that it will be its third investment in the rail sector, after High Speed 1 and the Dutch High Speed Rail Link.
The fleet has been initially leased under a 20-year availability contract with a revenue underpin from the Secretary of State for Transport, the company said.
"The fleet of 115 Siemens Desiro City Class 700 trains was fully delivered in 2018 and has a strong operational track record. Long term maintenance obligations are retained by the manufacturer, Siemens, under a direct contractual arrangement with the franchise operator, Govia Thameslink Railway, and therefore sit outside of the project company's delivery obligations," it explained.
The acquisition will be funded by HICL drawing upon its GBP730 million credit facility and existing cash resources. The stake will be bought from funds managed by Equitix Investment Management.
In July, the company secured a GBP330 million sustainability-linked extension to its revolving credit facility, increasing its overall short-term credit facilities to GBP730 million.
Edward Hunt, head of Core Income Funds at InfraRed said: "Cross London Trains is one of the largest rolling stock fleets in the UK. Its electrified trains are modern and efficient, sustainably serving the needs of commuting and leisure travellers alike.
"This investment further contributes to the delivery of HICL's vision to connect communities through investments in core infrastructure, while delivering long-term income to shareholders."
HICL shares were up 0.5% at 177.56 pence each in London early Friday.
By Sophie Rose; sophierose@alliancenews.com
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HICL Infrastructure (HICL)