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Consortium Acquires 33.33% stake in Cross London Trains

05 Feb 2019

A consortium comprising Dalmore Capital (“Dalmore”) and Equitix Investment Management (“Equitix”) has signed agreements to acquire a 33.33% stake in Cross London Trains Holdco 2 Limited (”XLT”) from 3i Infrastructure Plc (“3i”).

XLT was established in 2011 to finance, own and maintain 115 Siemens Desiro City Class 700 trains for the Thameslink passenger rail franchise.

XLT is one the largest single rolling stock fleets in the UK. It is part of the wider £7bn government funded infrastructure upgrade to provide essential congestion relief to London and the South East and significant additional capacity to support anticipated passenger growth.

XLT is in the final stages of acceptance with 1,140 carriage units in operation on the Thameslink corridor (connecting Kings Cross, St Pancras International, Blackfriars, London Bridge, Gatwick and Luton Airports and key commuter sections such as Sussex, Kent, Peterborough, and Cambridge).  The Class 700 fleet is expected to set new reliability standards for performance and add capacity for 60,000 additional peak passengers with trains running every 2-3 minutes through the centre of London.

Given the importance of the project for the network, the revenue is based on a lease structure benefiting from a Section 54. Undertaking from the Department for Transport for the first 20 years, with full ownership of the trains being retained at the end of this initial period.  This acquisition complements recent strategic acquisitions made by Dalmore and Equitix in the UK rail sector.

Michael Ryan, Chief Executive Officer of Dalmore Capital said “We are delighted to add XLT to our existing portfolio of rolling stock assets.  Assets like XLT with unique fleet characteristics, demonstrable benefits for network users and long term visibility on returns are very attractive to our investors.”

Geoff Jackson, Chief Executive Officer of Equitix, says “We are very pleased to have secured an interest in XLT which builds on our existing portfolio of high quality rail assets like HS1, Inter-City Express Programme West and Wales & Borders rolling stock. XLT is an excellent fit for our investors and further strengthens our position in the UK rolling stock market.”

Cantor Fitzgerald acted as financial advisor and Clifford Chance as legal advisor to the Consortium.