Korean institutional investors vying separately for Eurostar stake

2017.07.07 13:59:48 | 2017.07.07 15:17:35

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The National Pension Service (NPS) and other Korean institutional players are separately teaming up with European investors to bid for an interest in the lucrative high-speed railway Eurostar costing about 1.2 billion pounds ($1.5 billion).

According to the investment banking industry on Thursday, Korea’s NPS and other pension funds, associations and insurance companies will be joining consortiums of investors bidding for a stake in the High Speed 1 (HS1), Britain’s sole high-speed railway connecting London and Paris. The stake refers to rights over operation of the 109-km railway and four stations on the route.

Two are strong candidates. One is led by U.K.-based Dalmore Capital Ltd. and includes the Netherlands’ DIF and Britain’s Amber Infrastructure and GLIL. Korean associations and insurance companies would be financing 200 billion-300 billion won ($173 million-$259 million) in the pool. Korea’s NPS will be joining the other led by Equitix and InfraRed Capital Partners.

The right to own and operate HS1 was sold in 2010 to a Canadian consortium of Borealis Infrastructure and Ontario Teachers’ Pension Plan, which held a 50 percent stake each. They were given ownership for 30 years until 2040. They would then have to return the assets to the British government in the form of donation.

The new owners would hold the rights for the remaining 23 years and can expect an annual return of 7-9 percent from the stake.

By Han Woo-ram and Song Gwang-sup

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