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Virgin Trains IPO puts Las Vegas-SoCal rail line in motion

Virgin Trains USA LLC, the company that intends to build and operate a high-speed rail line between Southern California and Las Vegas, launched an initial public offering Wednesday.

The offering is expected to raise at least $481.7 million under anticipated pricing. In addition, Virgin Trains said it would grant underwriters a 30-day option to purchase an additional 4.3 million shares at the initial public offering price, which could raise at least an additional $72.3 million.

At maximum pricing, the issue could raise $619.1 million.

The IPO for 28.3 million shares will be underwritten by Barclays Capital Inc., J.P Morgan Securities and Morgan Stanley.

The offering, which is expected to be priced at between $17 and $19 a share, will be traded on the Nasdaq Global Select Market under the “VTUS” symbol.

The company announced in November through a prospectus filed with the Securities and Exchange Commission that it intended to establish an IPO.

Privately held Fortress Investment Group filed a preliminary prospectus that provided details about the expansion of rail service in South Florida and building a 185-mile dual-track line between Las Vegas and Victorville, California.

Fortress privately financed Brightline, a company that operates a train system in Florida. When Fortress announced the IPO bid in November it also announced plans to partner with British entrepreneur and adventurer Richard Branson to form Virgin Trains USA and take over the proposed XpressWest train route between Southern California and Southern Nevada.

Financial details of the XpressWest transaction were not disclosed, but the prospectus outlined plans to begin construction of the California-Nevada line this year and have it completed by the fourth quarter of 2021 or the first quarter of 2022.

According to the prospectus, the company expects to complete the Las Vegas-Victorville portion of the project for $3.6 billion, well short of the $7 billion XpressWest had estimated. The difference in cost is related to the company suggesting fewer daily trips and therefore fewer trains needed for the route. XpressWest had discussed running trains every 20 to 30 minutes.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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