Disposal and Launch of Share Buyback Programme

HICL Infrastructure PLC

28 February 2024

 

28 February 2024

HICL Infrastructure PLC

"HICL" or "the Company" and, together with its subsidiaries, "the Group", the London-listed infrastructure investment company managed by InfraRed Capital Partners Limited ("InfraRed" or the "Investment Manager").

HICL Announces Disposal of Northwest Parkway and
Launch of £50m Share Buyback Programme

·    Net proceeds of c. US$232m represents a c. 30%¹ premium to the Company's most recent valuation

·    Brings total value of disposals to over £500m for the past 12 months, demonstrating HICL's active approach to asset recycling

·    Proceeds will be allocated against HICL's RCF balance and used to launch a share buyback programme for up to £50m

·    InfraRed will continue to selectively consider attractive investment opportunities for HICL, where they represent a sufficiently accretive allocation of capital

Northwest Parkway Disposal

The Board is pleased to announce that HICL has entered into an agreement to dispose of its entire equity interest in the US Northwest Parkway toll-road project ("NWP") to VINCI Highways SAS for a net consideration of c. US$232m. The net proceeds represent a c. 30%¹ premium to the Company's 30 September 2023 valuation.

The Company joined its co-shareholders in a sale process to enable 100% of NWP to be sold to a strategic buyer. The Company believes the strong valuation reflects both this dynamic and the asset's strong inflation correlation, particularly over the past two years.

Completion is expected in Q2 2024, subject to customary third-party consents. Up to £50m of the sale proceeds will be used to fund a share buyback programme (see below) with the remainder allocated to the drawn balance on the Company's £650m Revolving Credit Facility ("RCF"), which is expected to be c. £135m drawn at 31 March 2024. InfraRed will continue to progress attractive investment opportunities for HICL, where these represent a sufficiently accretive allocation of capital and enhance portfolio composition.

Share Buyback Programme

The HICL Board continues to observe a material disconnect between public market valuations and private market transactions for inflation-correlated core infrastructure, as demonstrated by the c. 30%¹ disposal premium achieved on Northwest Parkway. Given the modest balance remaining on the RCF, and the material discount to net asset value at which the Company's shares currently trade, the Board therefore intends to allocate up to £50m of the disposal proceeds towards a share buyback programme. Repurchasing shares will provide shareholders with the benefit of NAV accretion, and will also help to reduce share price volatility. The Board intends to commence the programme in due course with the programme to run for a period of up to twelve months.

Mike Bane, HICL Chair, said:

"HICL's latest disposal yet again demonstrates the extent to which HICL's high quality portfolio continues to be undervalued by public markets. At a significant discount to NAV, HICL's shares represent a particularly attractive investment and a highly accretive allocation of disposal proceeds."

Edward Hunt, Head of Core Income Funds at InfraRed said:

"HICL has now successfully executed over £500m of disposals in the last 12 months, across a range of sectors and geographies, all at or above their respective carrying values. Alongside the buyback programme, this disposal reduces short-term borrowings and creates additional flexibility for the Company to selectively add attractive investment opportunities to the portfolio as they arise."

1.     US$ proceeds translated to c. £184m using an exchange rate of 1.26. The uplift versus the USD valuation at 30 September 2023 is 34%

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Enquiries

InfraRed Capital Partners Limited                            [phone] / [e-mail]

Edward Hunt

Helen Price

Mohammed Zaheer

Brunswick                                                           [phone] / [e-mail]

Sofie Brewis

Investec Bank plc                                                             [phone]

David Yovichic

RBC Capital Markets                                                       [phone]

Matthew Coakes

Elizabeth Evans

Aztec Financial Services (UK) Limited                    [phone]

Chris Copperwaite

Sarah Felmingham

HICL Infrastructure PLC

HICL Infrastructure PLC ("HICL") is a long-term investor in infrastructure assets which are predominantly operational and yielding steady returns. It was the first infrastructure investment company to be listed on the London Stock Exchange.

With a current portfolio of over 100 infrastructure investments, HICL is seeking further suitable opportunities in core infrastructure, which are inherently positioned at the lower end of the risk spectrum.

Further details can be found on the HICL website www.hicl.com.

Investment Manager (InfraRed Capital Partners)

The Investment Manager to HICL is InfraRed Capital Partners Limited ("InfraRed") which has successfully invested in infrastructure projects since 1997. InfraRed is a leading international investment manager, operating worldwide from offices in London, New York, Seoul and Sydney and managing equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed is authorised and regulated by the Financial Conduct Authority.

The infrastructure investment team at InfraRed consists of over 100 investment professionals, all with an infrastructure investment background and a broad range of relevant skills, including private equity, structured finance, construction, renewable energy and facilities management.

InfraRed implements best-in-class practices to underpin asset management and investment decisions, promotes ethical behaviour and has established community engagement initiatives to support good causes in the wider community. InfraRed is a signatory of the Principles of Responsible Investment.

Further details can be found on InfraRed's website www.ircp.com.

 

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