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| UK Businesses For SaleHSBC considers a disposal of its rail division
17/03/2008
British banking group HSBC is mulling a sale of its train-leasing division, HSBC Rail.
HSBC is under increasing pressure to offload noncore assets in order to generate cash, after huge write-downs resulting from exposure to the American sub-prime mortgage market. Bankers have said the rail unit is worth £1.5bn. However, this is believed to comprise a large amount of debt. HSBC has contacted a number of potential bidders for the division already, including groups that have shown interest in the acquisition of rival Royal Bank of Scotland's Angel Trains. Angel's bidders include American insurance group AIG, private-equity firm Terra Firma and Australia-based funds Macquarie and Babcock & Brown. Babcock & Brown, which has been given preferred-bidder status, is understood to be finding it difficult to secure funding for its bid. Angel's auction is taking longer than had been anticipated and HSBC bosses are nervous about beginning their own auction because of this. They are considering offering potential buyers funding to counteract the lack of debt which is currently available via credit markets. |
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