Ka-Shing builds UK portfolio in Eversholt deal

Caitlin Morrison
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Hong Kong-based tycoon Li Ka-Shing
HONG Kong business magnate Li Ka-Shing has bought Eversholt Rail Group from 3i Infrastructure, Morgan Stanley Infrastructure Partners, and Star Capital Partners.

In a deal with an enterprise value of £2.5bn, a joint venture led by Li’s company Cheung Kong Infrastructure (CKI) is to acquire the rail group, which owns 28 per cent of the current UK passenger train fleet.

The joint venture consists of CKI and Cheung Kong Holdings (CKH) each owning a 50 per cent interest. The deal is expected to close in March.

Li’s son, Victor Li, who chairs CKI and is also managing director of CKH, said the purchase of a rolling stock leasing business added a new facet to CKI’s portfolio.

“We are very happy to enter into this new industry. Eversholt Rail is poised to extend our growth momentum and generate recurring profit contributions similar to that of our other infrastructure projects,” he added.

Eversholt was bought by the 3i-led consortium for £2.1bn from HSBC in 2010. Shares in 3i Infrastructure went up by 3.47 per cent yesterday after the announcement. According to the firm, it will make around £358m from the deal.

Peter Sedgwick, chairman of 3i Infrastructure, said: “While 3i Infrastructure generally aims to hold its core investments over the long term, it will sell investments from time to time where this generates significant additional value for shareholders.

“We carefully evaluated the price offered against our assessment of the potential for the business, as well as the impact on our investment portfolio of selling this investment.”