TORONTO, Nov. 5 /CNW/ - Borealis Infrastructure (Borealis), the infrastructure investment arm of the OMERS Worldwide group of companies, and Ontario Teachers' Pension Plan (Teachers') have jointly entered into a binding contract today for the purchase of High Speed 1 (HS1), Britain's only high-speed rail link to the Channel Tunnel, following a competitive tender process. The acquisition values HS1 at £2.1 billion.
The British government, through state-owned London & Continental Railways, announced in June 2010 the start of a competition to sell a 30-year concession to own and operate the 68 mile HS1 rail network connecting St. Pancras International Station in central London through southeastern England to the Channel Tunnel.
"HS1 is a high-quality asset ideally suited to our investment criteria and we are extremely pleased that our bid was selected," said Stephen Dowd, Senior Vice-President, Teachers' Infrastructure Group. "HS1 will provide stable inflation-protected returns from proven and long-standing patronage levels, along with upside potential as the European Union moves to liberalize international rail travel. Teachers' has positive experience operating major assets in the UK and HS1 further diversifies our global infrastructure portfolio."
"This acquisition supports OMERS long-term strategy to diversify internationally and we view the UK and Europe as primary markets in meeting this objective," said Michael Rolland, President and Chief Executive Officer of Borealis Infrastructure. "HS1 operates in an attractive and stable regulatory environment with good long term visibility on inflation linked cash flows."
HS1 is used every year by over 9 million international and by over 5 million domestic passengers. It earns the majority of its revenues from track access charges under a framework that allows it to receive an inflation-adjusted income stream and recover its operating and maintenance costs from train operating companies. Approximately 60 percent of revenue is earned from domestic track access charges for high speed services operating between London and southeast England and the remaining 40 percent is earned from international services currently operating from London, Paris and Brussels.
Borealis Infrastructure is the infrastructure investment arm of the OMERS Worldwide group of companies. OMERS is one of Canada's largest pension plans with approximately C$48 billion in net assets invested on behalf of approximately 400,000 active and retired municipal employees and more than 900 local government employers in Ontario.
Borealis manages a diversified portfolio of infrastructure assets for OMERS including investments in energy, transportation, government-related services and institutional facilities. Borealis has over C$7 billion (£4 billion) invested in over 20 businesses. Its portfolio includes investments in Associated British Ports and Scotia Gas Networks in the UK and a significant majority interest in The Detroit River Rail Tunnel, a 2.6km freight railway tunnel which spans the business trade corridor between the U.S. and Canada and connects Windsor, Ontario and Detroit, Michigan in North America.
With C$96.4 billion in assets as of December 31, 2009, the Ontario Teachers' Pension Plan is the largest single-profession pension plan in Canada. An independent organization, it invests the pension fund's assets and administers the pensions of 289,000 active and retired teachers in Ontario.
Teachers' direct investments in the UK include Camelot Group, Acorn Care and Education, Bristol International Airport, Birmingham Airport, Scotia Gas Networks, InterGen and Thomas More Square Estate, as well as substantial shareholdings in a variety of publicly listed companies. It has offices in Toronto, London and New York.
For more information visit www.otpp.com
Ontario Teachers' Pension Plan
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