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16.08.13

Financing a ‘key factor’ in Siemens’ Thameslink win

The head of the Siemens division responsible for putting together the funding package for the Thameslink rolling stock deal says the financing was a “key factor” in the German company winning the contract.

Writing for RTM, Johannes Schmidt, CEO of Project & Structured Finance Infrastructure and Cities & Industry at Siemens Financial Services (SFS), says: “In the case of the Thameslink deal, SFS brought a full-suite of financing solutions to the table, including funding both debt and equity tranches for the rolling stock supply and maintenance, and the depot construction and operation. Whether acting in a specialist advisory, structuring or relationship building capacity, SFS’s leadership galvanised stakeholder confidence and built critical momentum for the project, playing a central role in securing the Thameslink contract and achieving this landmark in Siemens’ long history in the UK.”

He also says: “A vital aspect of the Thameslink deal was, of course, its financing structure. Indeed, the solid financing package put together by SFS was a key factor in convincing the Department for Transport (DfT) that the deal represents the best value-for-money for the UK taxpayer while also remaining attractive for private investors.”

Critics of the deal, who backed Bombardier’s rival bid that would have seen the trains manufactured in Derby, have long attacked the weight given to financing by the DfT in deciding the contract. This gave Bombardier, which had a lower credit rating, a built-in disadvantage, they say, regardless of the social impact of a decision that put jobs in Derby under threat.

Schmidt said that although the trains will be manufactured at Siemens’ factory in Krefeld in Germany, the company “has sought to incorporate the UK supply chain into the process where possible”. Siemens is also keen to remind people that it has been active in the UK for 170 years: it is not a newcomer to this country.

In his RTM article, Schmidt explains the intricacies of the financing, saying: “The deal has been financed with a debt facility arranged through a syndicated loan group consisting of 19 banks with SMBC, Lloyds, KfW and BTMU acting as mandated lead arrangers (MLAs), alongside a debt facility from the European Investment Bank. The Siemens-XLT consortium was advised by Barclays Capital throughout the financing arrangements.

“Meanwhile, the two depots [Hornsey in north London and Three Bridges in West Sussex] have been financed exclusively by Siemens Financial Services.”

The full article is in the August/September edition of RTM, out next week. Subscribe to the print or digital editions at www.railtechnologymagazine.com/subscribe

Tell us what you think – have your say below or email opinion@railtechnologymagazine.com

(Below: A worker welding a train door at Siemens’ train plant in Krefeld, western Germany. AP Photo/Frank Augstein)

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