HICL Buys PFI/PPP Portfolio

RNS Number : 2707U

HICL Infrastructure Company Ld

20 December 2011

 



20 December 2011

HICL Buys PFI/PPP Portfolio of 26 Projects for £143.4m

HICL Infrastructure Company Limited ("HICL" or the "Company", and together with its subsidiaries the "Group"), the listed infrastructure investment company, announces today that it  has acquired investments in 26 PFI/PPP projects from two infrastructure funds managed by Barclays Infrastructure Funds Management Limited.  Total gross consideration is approximately £143.4 million at current exchange rates.  Funding of this acquisition was from available cash resources and the Group's revolving debt facility.

Twenty one investments were acquired as part of a portfolio from the BEIF (UPP) Limited Partnership and the remaining five from the Barclays European Infrastructure Fund II Limited Partnership.

All of the 26 projects are operational and, apart from two investments in The Republic of Ireland (the Cork School of Music and a grouped schools project), all are based in the UK.

The portfolio of 26 investments comprises ten schools projects, eight health projects, five fire and police projects, two roads and a library project. Investment stakes in each project range from 25% to 100%.  The weighted average concession length of this portfolio exceeds 23 years.  Each project has its own long term debt finance. Whilst purchased as a portfolio, each investment is independent of the rest.

All of the projects have availability based income streams apart from the A249 road project which has a "steady flow" payment regime and the A92 road, which is mainly paid on availability but includes a modest element of shadow toll revenue.

The consideration paid is in line with discount rates used in HICL's September 2011 Directors' valuation and reflects current market prices.

Graham Picken, Chairman of the Company, said:

"We intimated at the time of the Company's interim results that the pipeline included a transaction at an advanced stage of negotiation.  We are pleased to have completed this acquisition on valuation metrics which compare favourably with our latest assessment of asset values in the Company's investment portfolio as a whole.

This acquisition is a portfolio transaction and, as a result, the Investment Adviser intends to conduct a further review in the New Year to evaluate any possible opportunities for selective disposals or bolt-on acquisitions.

Given the size of this acquisition and the use of the Group's revolving debt facility, the Board of the Company will now consider the quantum and timing of the Company's next capital raising by way of C Shares. I expect to make a further announcement on this in January 2012."

David Foot, Investment Director, InfraRed Capital Partners Limited (HICL's Investment Adviser) responsible for leading due diligence on the transaction, said:

"The team is pleased to have acquired this substantial portfolio of PFI/PPP investments. These new investments are an excellent complement to the existing portfolio, creating value potential and adding to the overall portfolio diversification.  This portfolio has positive inflation correlation similar to the Group's current portfolio.

We look forward to working with our new partners and stakeholders to ensure that each project performs well and is successful."

Enquiries:

InfraRed Capital Partners Limited         [phone]

Tony Roper

Keith Pickard

Sandra Lowe

Tulchan Communications                       [phone]

Ed Orlebar

Rebecca Scott

Collins Stewart Europe Limited             [phone]

Dominic Waters

Neil Brierley

Will Barnett

David Yovichic

HICL Infrastructure Company Limited

The Company is a long term investor in infrastructure projects which are predominantly in their operating phase and yielding steady returns. It was the first infrastructure investment company to be listed on the London Stock Exchange. It now owns a portfolio of 70 infrastructure investments, all of which are PFI/PPP/P3 projects, and is seeking further suitable investment opportunities which fit its stated Investment Strategy. Further details of the Company can be found on its website www.hicl.com.

Investment Adviser

The Investment Adviser to the Company is InfraRed Capital Partners Limited, whose infrastructure investment team has successfully invested in infrastructure projects since 1997.

InfraRed Capital Partners Limited is authorised and regulated by the Financial Services Authority.

Further information on the portfolio of 26 investments

The 26 investments and the group's equity holding in each project are listed below:

Project	Sector	Equity holding	FM contractor
A249 Sheppy Route	Road	50%	Carillion
A92 Claymore Roads	Road	50%	Ringway
Barking & Dagenham Schools	Education	85%	Ecovert FM (Bouygues)
Boldon School	Education	100%	Mitie
Cork School Of Music	Education	50%	HSG Zander
Croydon School	Education	100%	Vinci
Derby Schools	Education	80%	Vinci
Doncaster Mental Health	Health	50%	BAM FM
Doncaster Schools	Education	50%	Vinci
Dorset Fire & Rescue	Law, Fire & Order	33.5%	GDF Suez
Dorset Police	Law, Fire & Order	80%	Atkins
Ealing Care Homes	Health	68%	Viridian Housing
Glasgow ACAD	Health	25%	Parsons Brinckerhoff
Irish Grouped Schools	Education	50%	HSG Zander
Lewisham Hospital	Health	100%	Carillion
Manchester School	Education	50%	Hochtief
Medway Police	Law, Fire & Order	80%	Vinci
Newport Schools	Education	80%	Vinci
Newton Abbot Hospital	Health	50%	Rydon
Nuffield Hospital	Health	25%	G4S
Oldham Library	Accommodation	50%	Kier
Oxford Churchill Oncology	Health	40%	G4S / Impregilo
Rhondda Cynon Taf Schools	Education	100%	Vinci
Swindon Police	Law, Fire & Order	80%	Vinci
Tyne & Wear Fire Stations	Law, Fire & Order	100%	John Laing
Willesden Hospital	Health	50%	Accuro FM

 

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