Japanese investor to ditch £500m stake in HS1 and East Midlands Railway

Mitsubishi HC Capital is reportedly preparing to sell off £475m worth of UK rail assets as it steers away from the country’s embattled transport infrastructure.

Through the Japan Infrastructure Initiative (JII), the Japanese investor owns a £400m stake in East Midlands Railway trains and a £75m stake in High Speed 1 (HS1).

But an auction of these is expected to kick off in the spring as it looks to distance itself from a system that is increasingly getting off-track, according to The Times.

Cantor Fitzgerald from Wall Street is expected to advise on the sale, with the East Midlands investment to go first, followed by the HS1 stake.

City A.M. approached Mitsubishi HC Capital and Cantor Fitzgerald for comment.

JII, launched in 2016 to support Japanese infrastructure exports, has other UK ventures, including a stake in the disastrous £5.7bn inter-city trains programme.

A withdrawal from the UK by JII could spell trouble for Hitachi too, especially as doubts creep in over their commitment to the nation post the government’s decision to axe the Manchester leg of HS2.

Just a few weeks ago, Hitachi’s UK operation also took a multimillion pound writedown on the value of its plant in County Durham, citing issues including a production gap and inflation.