ON APRIL 3 bus and rail operator Stagecoach Holdings confirmed that it was selling its rolling stock leasing company Porterbrook to British banking group Abbey National for £1·4bn. The deal was subject to approval by the Stagecoach shareholders, who were to vote before the end of the month.
Abbey National will pay £773m in cash for Porterbrook, and assume £669m in external debts. Stagecoach has been looking for some time to find a partner for Porterbrook, as the company needs access to capital for investment in new rolling stock. In the end, the group decided that an outright sale was the better option. Both the other ex-British Rail Roscos are owned by financial institutions: Angel by Royal Bank of Scotland and the former Eversholt Leasing by HSBC.
In the six months to October 31, Porterbrook accounted for almost 40% of Stagecoach profits, earning £70·5m on a turnover of £138·2m. By comparison, Stagecoach’s rail operations made £19·2m profit on a turnover of £186·4m. Following the news of the sale, and a profits warning about other operations, Stagecoach shares fell by 50p to 70p.