3i Infrastructure to sell stake in Cross London Trains

XLT was established to procure and lease the rolling stock for use on the Thameslink passenger rail franchise.

3i said that estimated proceeds from the sale, which is conditional on certain third party consents, are around £333m, compared to a valuation of £271m at 30 September 2018.

Adjusting for the estimated proceeds, the group's pro-forma September 2018 net asset value is estimated to have increased to 229.3p per share, after payment of the interim dividend.

Completion is expected prior to the company's year-end.

Chairman Richard Laing said: "XLT has proved a very good investment for the company, generating significant value for our shareholders. Having supported the project through design, manufacturing and delivery, we believe that now is an appropriate time for the company to realise its stake."

Phil White, managing partner and head of Infrastructure at 3i Investments, investment manager of the company, said: "XLT is another successful investment for 3i Infrastructure. In partnership with our co-shareholders, our involvement since the start of the procurement programme in 2008 has helped to deliver, on time and on budget, a key element of London's commuter rail infrastructure."

At 1610 GMT, the shares were up 2.3% to 272.65p.

RBC Capital Markets analyst John Musk said: "We see this sale as a clear valuation positive for 3IN, showing strong value creation on a project 3IN has been involved with since 2008. The sale also demonstrates strong demand for assets in the secondary market, which may aid future realisations for 3IN. Investors will now be looking for 3IN to make future investments using the balance sheet strength into other value-creative assets.

"We continue be impressed by 3IN’s portfolio management with its recent track record demonstrating that it invests in assets that trend in the right direction, exits where the price exceeds 3IN's potential holding value, and manages down risks where appropriate."