02 December 2010
Moscow - The Macquarie Renaissance Infrastructure Fund (MRIF or the Fund) has agreed to invest US$125 million in Brunswick Rail Limited (Brunswick Rail or the Company) through a combination of equity and mezzanine debt with equity conversion rights. The equity investment will give an initial 16% interest in Russia’s largest privately owned rail rolling stock leasing company and a board position.
The investment is part of a capital raising of equity and debt conducted by Brunswick Rail to raise a total of US$500 million to support the Company’s significant expansion plans.
The strength of the sector, and of the Company itself, is reflected in the strong organic growth Brunswick Rail has achieved since it began operations in 2004. The Company started with 600 rail cars and today has more than 12,000 with significant potential for growth as Russia’s rail volumes grow and the fledgling leasing market develops.
Andrew Cowley, the CEO of MRIF, said, ”The rail industry is the backbone of Russia’s transport infrastructure accounting for around 85 per cent of total freight transport in Russia, and playing an essential role in its economic development. With support from our blue chip investors, who include Vnesheconombank as cornerstone investor, EBRD, IFC and Kazyna Capital Management, we will help to ensure the Company’s growth and its strategic plans to invest in new generation rail cars are soundly financed.”
“Brunswick Rail is very pleased to welcome MRIF as its shareholder and strategic partner. The Fund’s support will be invaluable as we continue to expand our fleet and grow our business through greater penetration of leasing in the region’s rail market,” said Vladimir Lelekov, CEO of Brunswick Rail.
“Brunswick Rail is the Fund’s first investment, and demonstrates the momentum MRIF is building,” said Stephen Jennings, Renaissance Group CEO. “The Fund is successfully leveraging Renaissance’s depth of experience in Russia, Macquarie’s global leadership in the infrastructure sector and the quality of the Fund’s investor base to maximise its advantage as the region’s first dedicated CIS infrastructure fund.”
About Macquarie Renaissance Infrastructure Fund
Macquarie Renaissance is a joint venture between Macquarie Group and Renaissance Capital, with the aim of developing infrastructure advisory and fund management opportunities in Russia and the CIS. MRIF offers investors a unique opportunity to gain diversified exposure to this large and growing infrastructure market, leveraging Macquarie’s global leadership in the infrastructure sector and Renaissance’s depth of experience in the CIS region.
In its first two closings MRIF has attracted major investors including cornerstone investor Vnesheconombank (the Russian State development bank), the International Finance Corporation, the European Bank for Reconstruction and Development, Kazyna Capital Management (a subsidiary of the Kazakh sovereign wealth fund), Macquarie Group and Renaissance Group.
Governments in the CIS region have recognised the significant need to renew and expand infrastructure to facilitate economic growth. The Russian government in particular has highlighted this need, emphasising the potential role of the private sector in improving existing infrastructure and accelerating the development programme. MRIF is committed to being a key player in this development and is the first major private fund dedicated to investing directly in infrastructure in Russia and other key CIS markets. MRIF is actively seeking quality investments which will make a significant contribution to modernising the region’s infrastructure.
About Macquarie Group
Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services. Macquarie Group Limited is listed in Australia (ASX:MQG) and is regulated by APRA, the Australian banking regulator, as the owner of Macquarie Bank Limited, an authorised deposit taker. Through its specialist funds, Macquarie is an experienced investor in significant infrastructure and community assets, delivering important services including transport, roads, airports and utilities around the world. Founded in 1969, Macquarie operates in more than 70 office locations in 28 countries. It employs approximately 15,500 people and has assets under management of US$306 billion at 30 September 2010.
About Renaissance Group
Renaissance Group is an independent group of investment banking, asset and wealth management, merchant banking, and consumer finance companies specializing in high-opportunity emerging markets. Renaissance Group operates in Russia, Ukraine, Kazakhstan, Africa, Hong Kong, the United Kingdom, the United States and Cyprus.