Placing & Subscription Offer

HSBC Infrastructure Company Limited
23 April 2008


 Not for publication, release or distribution in whole or in part in Australia,
                       Canada, Japan or the United States



                      HSBC Infrastructure Company Limited


 Placing and Offer for Subscription of up to 145,000,000 C Shares of 0.01 pence
                  each at an Issue Price of £1.00 per C Share



The Board of HSBC Infrastructure Company Limited ('HICL' or the 'Company') today
announces its intention to raise up to £145 million by means of a Placing and
Offer for Subscription of C Shares.


Introduction

HICL is a London listed, limited liability, Guernsey-incorporated, closed-ended
investment company that makes infrastructure investments. HSBC Specialist Fund
Management Limited ('HSFML'), an investment manager authorised and regulated in
the UK by the Financial Services Authority, acting through members of its
Infrastructure Investment Team, acts as Investment Adviser to the Company and as
Operator of the Partnership.


The Company was launched on 29 March 2006 and has 250 million Ordinary Shares in
issue which are admitted to the Official List and to trading on the London Stock
Exchange Main Market. As at 31 March 2008 the Company had a market
capitalisation of £293.8 million. As at 30 September 2007, the aggregate net
assets of the Company on an investment basis were £305.8 million.


At the time of the Company's listing all the funds raised were fully invested or
committed through the acquisition of the Initial Portfolio of 15 investments
valued at £250.4 million as at 31 March 2006. At launch the Group intended to
make further infrastructure investments to be funded by cash reserves held
pending investment, by borrowing facilities or by raising additional capital in
the market.


Highlights


   • HICL has increased its portfolio of assets from 15 to 27 since launch.
    These assets including schools, hospitals, and police stations have high
    quality cash flows from long term contracts, generally from public sector or
    government clients with strong credit quality.


   • The proceeds are intended to be used to pay down the Group's existing
    debt in order to provide greater flexibility to invest in new infrastructure
    opportunities as these arise.


   • The total value of the Current Portfolio as at 31 March 2008 was £437.9
    million, up 14 per cent from 30 September 2007. Based on this valuation, the
    Net Asset Value, on an investment basis, as at 31 March 2008 is expected to
    be approximately 123 pence per Ordinary Share.


   • HICL has outperformed the FTSE All Share Index by 25.9 per cent over the
    period 29 March 2006 to 31 March 2008 and has provided an annualised total
    shareholder return of 13.3 per cent over this period.


   • The Current Portfolio has performed better than the Company's
    projections at the time of launch. From 29 March 2006 to 30 September 2007,
    the Net Asset Value per Ordinary Share of the Company increased from 98.4
    pence to 119.25 pence (after deduction of the 3.05p interim distribution).



   • The company will pay a second interim distribution of 3.2 pence for the
    financial year ended 31 March 2008 which brings the total distribution for
    the 2008 financial year to 6.25 pence, up from 6.1 pence in 2007. The second
    interim distribution of 3.2 pence per share will be payable on 23 May 2008
    to ordinary shareholders on the register at 2 May 2008.


Graham Picken, Chairman of HICL said: 'We are very pleased with the performance
of the business since we launched in March 2006. The additional funds that we
seek will allow us to pay down debt and position us to seek new opportunities to
continue the growth of the business.'


Background and reasons for the Issue


The Group acquired the Initial Portfolio shortly after launch. Over the period
since launch the Group has acquired twelve further infrastructure investments,
which have been financed by the Group's debt facilities.


In December 2007 the Company took out a £200 million multi-currency revolving
credit facility with the Bank of Scotland plc. Following the £20.5 million final
equity subscription in the Colchester Garrison project in April 2008 the Group
has existing debt of approximately £145 million.


The Company is now proposing to raise up to £145 million (before expenses)
through the Placing and Offer for Subscription of C Shares. It is intended that
the net proceeds of the Issue will be used to pay down the Group's existing
debt. In order to implement the repayments of debt, the Company will transfer to
the C Share portfolio a pro rata share of the Current Portfolio with a value
equal to the net proceeds of the Issue, in consideration for the purchase by the
C Share portfolio of loan notes through the Group.


The repayment of the existing debt will provide the Group with greater
flexibility in making further investments in the infrastructure market as
suitable opportunities arise.


The Directors believe that the use of C Shares is the most appropriate method by
which to raise further equity capital, as it will ensure that the costs of the
Issue are borne fully by new investors and will therefore not dilute the Net
Asset Value of existing Ordinary Shares.



Benefits of the Issue

The Directors believe that the Issue will have the following benefits:

   •It is intended that the net proceeds of the Issue will enable the Group
    to repay existing borrowings, thereby providing the Group with greater
    flexibility in making further investments in the infrastructure market as
    opportunities arise;
   •Shareholder funds will be fully invested in the Current Portfolio shortly
    after the Issue, which will avoid the Company holding uninvested cash
    balances and will remove the potential effects of cash drag on shareholder
    returns;
   •Existing shareholders will have the opportunity to subscribe for further
    shares in the Company, while other investors will be able to make an
    investment for the first time, and in each case subscription for C Shares
    will rapidly provide full exposure to the Current Portfolio of
    infrastructure assets;
   •The market capitalisation of the Company will increase, and the secondary
    market liquidity in the Company's Ordinary Shares is expected to be enhanced
    following Conversion as a result of a larger and more diversified
    shareholder base; and
   •The Company's fixed running costs will be spread across a wider
    shareholder base, thereby reducing the total expense ratio.



Investment objectives

The Company seeks to provide investors with long-term distributions, at levels
that are sustainable, and to preserve the capital value of its investment
portfolio over the long-term with potential for capital growth.


The Company targets a progressive distribution policy and growth of its annual
distributions to 7p per Ordinary Share within 5 years.


The Company is targeting an IRR of 7 to 8 per cent.* on the original issue price
of its Ordinary Shares in March 2006, to be achieved over the long-term via
active management, including the acquisition by the Group of further investments
to complement the Current Portfolio and by the prudent use of gearing.



Investment opportunity

The Directors and the Investment Adviser believe that an investment in
infrastructure assets, a relatively new investment class for investors, offers
the following features, which potentially compare favourably with an investment
in other asset classes such as non-infrastructure equities and real estate:

   •Low correlation to equity investment and limited exposure to economic and
    business cycles;
   •Concessions which generally have central or local government
    counterparties, providing strong credit quality;
   •A growing income stream supported by indexation of contract revenues;
   •Underlying market demand for infrastructure remains strong worldwide -
    given political and economic imperatives and public budget constraints;
   •Recent market turmoil in financial markets has highlighted the stability
    of infrastructure assets; and
   •Valuation of infrastructure projects has been stable reflecting the
    inherent value in the underlying income streams for assets in both primary
    and secondary markets.


The Directors also believe that an investment in the Company more specifically
offers the following benefits:

   •Growing dividend from 6.1p per Ordinary Share;
   •Preservation of capital value of investment portfolios with potential for
    capital growth;
   •A diversified portfolio primarily focused on equity investments in
    operational yielding assets with proven track record, rather than assets
    under construction;
   •Current Portfolio assets combine size and scale to maintain balance and
    diversification across portfolio;
   •The Group has the possibility of purchasing additional equity in Current
    Portfolio projects, giving opportunity to enhance returns through benefits
    of scale;
   •Cash proceeds of the Issue will be immediately invested;
   •Management team has strength and depth in key skills - deal sourcing,
    deal structuring and portfolio management, enhancing returns on low risk
    basis;
   •The Group has recently negotiated five-year debt facilities on attractive
    terms for shareholders. Underlying projects have long term amortising debt
    and do not require refinancing;
   •The Company provides investors with comprehensive range of information
    enabling them to understand how portfolio is performing;
   •Access to HSBC global network gives the Group potential to source and
    execute deals. HSBC also provides potential supply of target assets from
    existing primary funds; and
   •Management team has experience of operating in international arena where
    growth opportunities are strong.




Expected Key dates

Latest date and time for receipt of Application Forms      1.00pm on 15 May 2008
under the Offer for Subscription               
                                   
Latest time and date for receipt of Placing commitments    5.00pm on 15 May 2008

Announcement of Placing and Offer for Subscription results           16 May 2008

Admission to the Official List and unconditional           8.00am on 21 May 2008
dealings in the C Shares to commence on the London Stock Exchange                         


The Prospectus will be posted to Shareholders. Copies of the Prospectus may be
obtained by calling the offices of Oriel Securities Limited on [phone]
or by emailing [e-mail]. Copies of the Prospectus will 
also be available on the companies website www.hicl.hsbc.com.


It can also be collected, free of charge during normal business hours, from any
of the following:



HSBC Infrastructure Company Limited   Lovells LLP      Oriel Securities Limited
Dorey Court                           Atlantic House   125 Wood Street
Admiral Park                          Holborn Viaduct  London
St Peter Port                         London           EC2V 7AN
Guernsey                              EC1A 2FG
Channel Islands
GY1 3BG


Two copies of the Prospectus will be submitted to the UK Listing Authority and
will shortly be available for inspection at the UK Listing Authority's Document 
Viewing Facility situated at:

Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS



For further information, please contact:

HSBC Specialist Fund Management Limited              [phone]
Tony Roper
Keith Pickard
Sandra Lowe

M: Communications                                    [phone]
Ed Orlebar
Tilly von Twickel

Oriel Securities Limited                             [phone]
Tom Durie
Emma Ormond

Dresdner Kleinwort Securities Limited                [phone]
Dominic Waters                                       [phone]
Robbie Robertson                                     [phone]
David Yovichic


* These are targets only and are not profit forecasts. There can be no assurance
that these targets will be met or that the Company will make any distributions
whatsoever or that investors will recover all or any of their investments.


Terms used in this announcement unless otherwise defined shall have the meanings
given in the Prospectus expected to be issued by the Company in respect of the
Issue on 23 April 2008.



For further information about HICL please see our website:

www.hicl.hsbc.com


This announcement and the information contained herein is restricted and is not
for publication, release or distribution in whole or in part in Australia,
Canada, Japan or the United States. This announcement is not a prospectus and
investors should not subscribe any C Shares referred to in this announcement
except on the basis of information in the final prospectus to be published by
HICL (the 'Prospectus'), both in connection with the admission of its C Shares
to the Official List of the UK Listing Authority and to trading on the main
market for listed securities of London Stock Exchange plc. Copies of the
Prospectus will be available from the registered office of HICL at Dorey Court,
Admiral Park, St Peter Port, Guernsey, GY1 3BG and at the offices of Lovells LLP
at Atlantic House, Holborn Viaduct, London, EC1A 2FG and at the offices of Oriel
Securities Limited, 125 Wood Street, London, EC2V 7AN in due course.


This announcement does not constitute an offer of, or the solicitation of an
offer to buy or subscribe for, C Shares to any person in any jurisdiction to
whom or in which such offer or solicitation is unlawful and, in particular, is
not for release, publication or distribution in or into the United States,
Australia, Canada or Japan. The Offer for Subscription and the Placing of the C
Shares has not been and will not be registered under the US Securities Act of
1933, as amended or under the applicable securities laws of Australia, Canada or
Japan. Subject to certain exceptions, the C Shares may not be offered or sold in
Australia, Canada, Japan or the United States.


The contents of this announcement have been prepared by and are the sole
responsibility of HICL. Oriel Securities Limited ('Oriel Securities') and
Dresdner Kleinwort Securities Limited ('Dresdner Kleinwort'), both of whom are
regulated by the Financial Services Authority, are acting exclusively for HICL
and no-one else and will not be responsible to anyone other than HICL for
providing the protections afforded to the clients of Oriel Securities and
Dresdner Kleinwort respectively, nor for affording advice, the contents of this
announcement or any matter is referred to herein.






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