Infra fund super-consortium emerges for HS1 bid

24 February 2017 - 12:00 am UTC

Dutch fund manager DIF has joined forces with UK managers Dalmore Capital and Amber to bid for the UK’s HS1 high-speed rail link, InfraNews has learnt.

Allianz and GMPF & LPFA Infrastructure LLP – the joint venture of Greater Manchester Pension Fund and London Pensions Fund Authority – make up the other members of the super-consortium, it is understood. 

A UK fund manager team of Equitix and InfraRed Capital Partners has also been linked to the deal, according to two sources. A third source said that Equitix has been looking at the deal but that it was too early to tell whether it will submit a bid.

Macquarie has also been eyeing the asset, one source added. A separate source said that Macquarie has not ruled out putting in an offer, but at this stage is unlikely to do so.

Macquarie declined to comment, as did Equitix, InfraRed and the DIF consortium members.

The owners of HS1 – OTPP and Borealis – last December appointed BAML as financial adviser on the sale having received a number of investment enquiries from third parties, as reported.

The Canadian funds, which currently own 50% each of HS1, are widely expected to sell the entire 100% interest in the asset, according to market sources. IMs are due to be circulated in April, as previously reported.

OTPP and Borealis acquired the 30-year concession for GBP 2.1bn from the Department for Transport (DfT) in November 2010. 

The Canadian investors outbid three other consortia at the time of the 2010 auction: A team of Eurotunnel, Goldman Sachs, Prudential M&G, CDC Infrastructure and USS; a tie-up of Morgan Stanley, 3i Infrastructure and ADIA; and a consortium including Allianz, PSP and Hermes.

The high speed rail link includes Eurostar services between London and European destinations as well as domestic high-speed services between London and Kent. 

The concession owners are also responsible for the stations, which include St Pancras International, and international terminals at Stratford, Ashford and Ebbsfleet.

In April 2015, the sponsors closed a GBP 386m refinancing of debt linked to HS1, which is also known as the Channel Tunnel Rail Link. The transaction to extend the tenor of the debt saw seven banks provide term loans of five and seven years, and also included an index-linked bond solution with a 2038 maturity.

Linklaters is acting as legal adviser and Arcadis is technical adviser to the sellers on the disposal.