Two Canadian pension giants have appointed an American investment bank to explore a £3.6bn sale of the Channel tunnel rail line.
Borealis and Ontario Teachers’ Pension Plan are considering selling the High Speed 1 route between London and Folkestone — six years after the government sold them a 30-year contract to run the line for £2.1bn.
The funds, which manage the pensions of thousands of Ontario police, firefighters, council workers and teachers, have appointed Bank of America Merrill Lynch to handle the potential sale.
HS1 made underlying profits of £180m last year and has paid handsome dividends in recent years — £55m in 2015 and £200m in 2014.
The 68-mile line opened in 2007 at a cost of £6.2bn. Whitehall’s spending watchdog reckons it will eventually cost taxpayers £10.2bn.
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The possible sale comes amid feverish demand for infrastructure assets, driven by low interest rates. National Grid last month agreed to sell a controlling stake in its gas pipelines business to a consortium backed by Macquarie, the Australian bank, and the Chinese sovereign wealth fund. The deal was valued at about £13.8bn including debt.
In February a consortium including Ontario Teachers and Borealis swooped on London’s City airport in a deal worth more than £2bn.