Additional Investment in BeNEX Rail Company
additional investment in benex rail company
2 April 2019
International Public Partnerships Limited ('the Company', 'INPP'), the listed infrastructure investment company, announces that it has entered into a sale and purchase agreement to acquire a further 51% shareholding in BeNEX GmbH ('BeNEX') from Hamburger Hochbahn AG ('HHA'), the City of Hamburg's municipal public transportation company.
The Company has agreed to invest up to approximately €54 million of which part will be subscribed immediately as additional capital to BeNEX (which will be used primarily to reduce certain debt which was linked to a requirement for HHA to be a continuing shareholder) and the remainder will be used to acquire the additional 51% shareholding. The transaction will therefore see INPP's ownership increase from 49% to 100%. The payment to acquire the shareholding will be deferred and is expected to be paid over the period to 2026 and is expected to be funded by a return of capital from BeNEX over the same period.
BeNEX both leases rolling stock and invests in train operating companies ('ToCs') which operate rail services under concession agreements with German federal states. When the Company acquired its initial 49% stake in 2007, it formed a partnership with HHA to assist in growing BeNEX's business to benefit from the reform that was taking place in the German rail industry.
Since acquisition, BeNEX has been a successful investment for INPP and it has seen continued growth. It has a highly experienced management team that actively manages its fleets and operations. As of 31 December 2018, it had 86 trains on lease to seven different ToCs (six of which are fully or partly owned by BeNEX). Under the joint ownership of HHA and INPP, the number of operating concessions managed by BeNEX ToCs increased from eight to 12.
Key investment features include:
· A federal state is the public-sector counterparty for each individual train operating concession;
· Concession agreements typically provide an indexed revenue stream to adjust for operating cost increases over the term of the concession;
· BeNEX does not take risk on passenger numbers or fare receipts on the majority of its concessions; and
· BeNEX benefits from a strong and successful management team.
The Company's acquisition of the additional stake in BeNEX is subject to a number of conditions precedent. These are expected to be met over the next two months and financial close is anticipated before the end of June 2019.
ENDS.
For further information:
Erica Sibree/Amy Joslin +44 (0)20 7939 0558/0587
Amber Fund Management Limited
Hugh Jonathan +44 (0)20 7260 1263
Numis Securities
Ed Berry/Mitch Barltrop +44 (0) 20 3727 1046/1039
FTI Consulting
About International Public Partnerships (INPP):
International Public Partnerships ('INPP') is a listed infrastructure investment company which invests in global public infrastructure projects and businesses, which meets societal and environmental needs, both now, and into the future.
INPP is a responsible, long-term investor in 130 infrastructure projects and businesses, including utility and transport businesses, transmission projects, schools, courts and police headquarters in the UK, Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth.
Amber Infrastructure Group ('Amber') is the Investment Adviser to INPP and consists over 120 staff who are responsible for the management of, advice on and origination of infrastructure investments.
Visit the INPP website at www.internationalpublicpartnerships.com for more information.
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