Two banking giants, Spain's Banco Santander and the UK-based HSBC, which managed to survive the credit crunch and did not need to avail bailout packages from their espctive governments, and also managed to bring their banking operations to Tier I ratio levels from their own internal resources, are now selling their train leasing arms in deals with a European bankers' worth of almost £4 billion in order to recapitalise their balance sheets, which would also lead to the sale seeing around two-thirds of British trains with new owners.

Abbey, which is a UK subsidiary of Santander, has clinched a £1.4-billion deal with Antin Infrastructure Partners, a consortium of European bankers Deutsche Bank, Lloyds TSB and BNP Paribas, for its Porterbrook train leasing arm.
HSBC, which owns HSBC rail, has appointed N M Rothschild in addition to its own investment bankers to review and auction it for approx £2 billion.

Porterbrook has confirmed the definitive agreement by the consortium of European banks to acquire 100 per cent of the rolling stock leasing company, with completion expected by the end of this year subject to regulatory approvals.

The value of the deal which is £1.4 billion is the same amount that Abbey paid for acquiring the company from UK transport operator Stagecoach Group in April 2000.

Without assigning any reasons for the sale, Porterbrook's managing director, Paul Francis, said he was pleased to have concluded the transaction in the current difficult circumstances, "The good thing is that the company will benefit from the support and expertise of three different investors, who will be keen to build on what is already a successful business.

"The new equity consortium will provide Porterbrook with a sound base to develop the business further and to continue to invest in UK rail."

Of the nearly 14,000 trains in Britain, Porterbrook has a fleet of 5,500, HSBC Rail has more than 4,000, while 4,500 are owned by Angel Trains, which was sold by Royal Bank of Scotland in June to a consortium led by Australian investment bank Babcock & Brown for £3.6 billion.

Porterbrook's fleet of trains includes electric and diesel locomotives, high-speed trains, and freight wagons. It leases trains to 17 of the 24 UK train operators including Southern and South West trains -- two of the biggest commuter franchises while HSBC Rail are also used by National Express as inter-city trains on the east coast mainline between London and Edinburgh.

In the mid '90s the UK government under the premiereship of John Major privatised British Rail in a deal under which several financial institutions invested by buying trains through rail-leasing firms who, in turn, sold it to make huge profits amidst widespread criticism that the government had been short-changed.

Porterbrook dismissed fears that the sale, plus the recent £3.6-billion deal for Angel Trains, would delay plans to add 1,300 rail carriages to the British network by 2014.

The Department for Transport, which is commissioning the new carriages, said that any ownership changes would not affect its carriage programme.

At the start of this year, Porterbrook had placed a £93 million order for Turbostar trains, which will be leased to train operator Govia.