ROYAL Bank of Scotland yesterday unveiled a £3.6 billion deal to sell the UK's biggest train leasing company, Angel Trains, whose main customers are Virgin Trains and Stagecoach-owned South West Trains.
The buyer is a consortium led by an infrastructure fund managed by Australia's Babcock & Brown.
RBS is raising money to strengthen its balance sheet after buying part of Dutch bank ABN Amro last year and after writedowns.
The Edinburgh-based b
ank raised £12bn earlier this week in Britain's biggest-ever rights issue, and is also looking to sell its insurance business, including the Direct Line and Churchill brands. The consortium which is buying Angel Trains, which was selected as preferred bidder in February, also includes Deutsche Bank, AMP Capital Investors and Australian superfunds advised by Access Capital Advisers.
The deal came as shares in Babcock & Brown in Australia plunged for a second day on concerns about its debt and ability to raise funds.
However, Simon Gray, Babcock & Brown's head of European infrastructure, said: "The investment in the consortium is being made by Babcock & Brown European Infrastructure Fund, an un-listed private fund that is entirely separate from the Australian listed group, so it's in no way affected by what is going on with Babcock & Brown's share price in Sydney."
Angel is the biggest of the UK's three train leasing companies. The firm, along with HSBC Trains and Porterbrook, is currently under investigation by competition authorities.
Last December inquiry chairman Diana Guy said there "was a possibility that prices could be higher than those in a well-functioning market" and pledged to scrutinise the trio's profits.
Angel's buyers are hoping to capitalise on a growing rail market which has seen passenger numbers rise 50 per cent and freight traffic up 60 per cent.
The full article contains 304 words and appears in The Scotsman newspaper.
