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5 November 2010  

STAR Capital Partners acquires key shareholding in UK rolling stock company

Eversholt Investment Group ("EIG"), a consortium comprising equal stakes from STAR Capital Partners ("STAR"), 3i Infrastructure plc and Morgan Stanley Infrastructure Partners has signed an agreement to acquire Eversholt Rail Group ("Eversholt") from HSBC Asset Finance (UK) Limited, a wholly owned subsidiary of HSBC Holdings plc ("HSBC").

The transaction values Eversholt’s gross assets at approximately £2.1billion and the consortium will fund the acquisition through a combination of equity and debt.

Eversholt Rail Group is one of the three leading rail rolling stock companies in the UK. It owns approximately 29% of the total current British rail fleet with 19 fleets of rolling stock, specifically designed and built for the UK rail network. The fleets are leased to seven train operating companies and its revenues are primarily derived from long-term lease payments.

Paul Gough, Partner of STAR Capital Partners commented:

"STAR’s investment in Eversholt reflects our strategy of supporting capital intensive businesses with strong cash flow visibility and downside protection. There will be exciting opportunities for Eversholt to invest further in its existing portfolio as well as in new rolling stock to grow the business over the short to medium term. STAR is pleased that one of its major limited partners, PGGM, is investing alongside us in this transaction."

3i Investments plc and Morgan Stanley Infrastructure Partners commented:

“We are delighted to be acquiring Eversholt,” said Neil King, Partner in the Infrastructure team at 3i Investments plc, Investment Adviser to 3i Infrastructure plc. “Its strong market share, well-diversified customer base and high quality cash flows from leases contracted over the medium to long term make this an attractive asset with strong infrastructure characteristics.”

“Rolling stock fleets are an integral part of the UK’s transportation infrastructure, commented Jim Wilmott, Managing Director of Morgan Stanley Infrastructure Partners. “The past decade of high passenger growth means these fleets are fully utilised and likely to become more valuable as passenger numbers continue to grow. Eversholt is a well-run company with a successful strategy and we are looking forward to working with the management team and our consortium partners in building on this success.”

The transaction is expected to close by the end of 2010.


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