Hitachi Ltd.’s U.K. unit signed a 2.2 billion pound ($3.4 billion) loan to help pay for the purchase and maintenance of trains for the country’s Great Western Main Line, Japan Bank for International Cooperation said in a statement today.
Agility Trains, a consortium comprising Hitachi and Henderson Group Plc’s infrastructure developer John Laing Plc, expects to complete the borrowing this week, according to three people familiar with the matter. The facility will have maturity of 20 to 30 years, the people said, asking not to be identified because the details are private.
Tokyo-based Hitachi, which provided high-speed trains for the British-side of the Channel Tunnel, won the 4.5 billion-pound train order as part of the Agility Trains group, the U.K.’s Department for Transport said in a statement today. The so-called Intercity Express Program is a project to replace Britain’s Intercity 125 trains with new, higher-capacity modern trains, according to the statement.
Hitachi will assemble an intercity fleet of 92 trains at a new purpose-built factory in Newton Aycliffe, County Durham. It will also construct maintenance depots in Bristol, Swansea, west London and Doncaster, and will upgrade its existing maintenance depots throughout Britain, according to today’s statement.
“Hitachi is the latest major international company to invest on this scale in Britain,” U.K. Transport Secretary Justine Greening said today. “It means 730 new skilled jobs created at the factory, 200 jobs in constructing the plant and thousands of jobs secured in the supply chain.”
Atsushi Konno, a Tokyo-based manager in the public relations section of Hitachi, declined to comment on the financing when reached by telephone today.
JBIC will provide 1 billion pounds of the facility, according to a statement on its website today. The rest will be supplied by lenders including Bank of Tokyo-Mitsubishi UFJ Ltd., Mizuho Corporate Bank Ltd., Sumitomo Mitsui Banking Corp., Mitsubishi UFJ Trust and Banking Corp., Sumitomo Mitsui Trust Bank Ltd., Lloyds TSB Bank Plc and HSBC Holdings Plc, it said.
HSBC also acted as the deal’s financial adviser, the people familiar with the matter said today.
Hitachi has $11 billion-equivalent of bonds and loans outstanding, according to data compiled by Bloomberg. The maker of nuclear reactors and air-conditioners is rated A3 by Moody’s Investors Service, its fourth-lowest investment grade, the data show.
Shares of Hitachi fell 2 percent to 434 yen at close of trading in Tokyo today. The stock has gained 7.4 percent this year, compared with a 1.1 percent decline in the Nikkei 225 Stock Average.