RBS to sell Angel Trains for 3.6 billion pounds

By Denny Thomas and Marc Roca

SYDNEY/LONDON (Reuters) - Royal Bank of Scotland (RBS) (RBS.L) bolstered its finances on Friday with the sale of leasing firm Angel Trains to a fund managed by Australia's Babcock & Brown (BNB.AX) for $7 billion (3.6 billion pounds), including debt.

Babcock & Brown's European Infrastructure Fund, which is leading the purchasing consortium, said the deal would be unaffected by a plunge in shares of Babcock & Brown (BNB.AX) amid concerns about its debt and ability to raise funds.

RBS is raising money to strengthen its balance sheet after buying part of Dutch bank ABN AMRO last year and after writedowns. Britain's second-biggest bank raised 12 billion pounds this week in the biggest ever rights issue, and is also looking to sell its insurance business.

The Angel Trains sale price is slightly above the 3.5 billion tipped by some analysts and should boost RBS's capital by 250 million to 300 million pounds.

By 2:19 p.m. British time RBS shares were up 3 percent at 236 pence, helped also by the financial watchdog saying it would impose disclosure rules on short-selling.

"I believe it is one of the largest acquisitions in Europe in the last few months and probably since the problems in the credit markets started last summer," Babcock & Brown head of European infrastructure Simon Gray told reporters on a conference call.

The consortium buying Angel Trains, which was selected as preferred bidder in February, also includes Deutsche Bank (DBKGn.DE), AMP Capital Investors and Australian superfunds advised by Access Capital Advisers.

"The investment in the consortium is being made by Babcock & Brown European Infrastructure Fund, an un-listed private fund that is entirely separate from the Australian listed group, so it's in no way affected by what is going on with Babcock and Brown's share price in Sydney," Gray added.