Investment fund GLIL Infrastructure today announced that it will buy a 30 per cent equity stake in rolling stock firm Agility Trains East (ATE) from Hitachi Rail.
It is believed that the fund will pay around £400m for the stake, in line with what fellow investor AIP Management paid for a similar interest in the firm.
Hitachi Rail makes up the rest of the three-part consortium, retaining a 40 per cent stake in ATE, which has built a fleet of 65 new trains to run on the East Coast Main Line.
The firm was established in partnership with the Department for Transport (DfT) to develop the Intercity Express Programme, an initiative to replace the country’s fleet of intercity-class trains with a new reliable and efficient fleet.
All 65 of these new trains are already in operation on the line, which runs between London Kings Cross and cities such as Leeds, Newcastle, Edinburgh, Glasgow, Inverness and Aberdeen.
The fleet is supported by a long-term maintenance agreement with Hitachi and is backed by a 27 and a half-year guarantee period with the DfT.
Jonathan Ord, investment director at GLIL Infrastructure, said: “Rail infrastructure is fundamental to the future of the UK as the nation looks to build an ever more integrated, greener economy and society.
“We’ve invested in the impressive ATE fleet to support that goal, but also to provide reliable and sustainable returns for our pension members for many years to come. Our very long-term investment horizon offers further assurance to this environmentally sustainable infrastructure asset.”
The deal is the ninth investment by GLIL, the £1.8bn infrastructure fund backed by Local Pensions Partnership and Northern LGPS.
The firm has investment £1.5bn in infrastructure projects by companies such as Anglian Water, Clyde Windfarm, Forth Ports and Rock Rail.