Portfolio Disposal for c. £204m

HICL Infrastructure PLC

28 September 2023

 

28 September 2023

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".)

Portfolio Disposal for c. £204m

·    Sale of five UK assets at a premium to HICL's 31 March 2023 valuation

·    c.£310m of accretive disposals announced since March 2023

·    Reduces revolving credit facility drawings to c. £130m at completion

The Board is pleased to announce that HICL has agreed to dispose of a portfolio of five assets to John Laing, an international core infrastructure investor. The portfolio is made up of HICL's entire equity interest in four UK PPP projects; Queens (Romford) Hospital, Oxford John Radcliffe Hospital ("OJR"), Priority Schools North East Batch and South Ayrshire Schools, in addition to half of its investment in the Hornsea II OFTO².

The total consideration for the transaction is c. £204m, which represents a small premium to the Company's last audited valuation for the relevant assets at 31 March 2023. This accretive transaction evidences the robustness of the Company's net asset value, improves portfolio construction, and enhances the key metrics of yield, inflation correlation and asset life. The partial sell-down of the recently acquired Hornsea II OFTO was envisaged at the time of acquisition and demonstrates responsible balance sheet management against a challenging market environment.

Completion of all five disposals is expected before HICL's 31 March 2024 year-end. The transaction proceeds will reduce the drawings on the Company's Revolving Credit Facility to c. £130m.

The largest of the five assets¹, OJR, was developed by Carillion plc under the private finance initiative and HICL acquired its interests in 2010 and 2012. Following the liquidation of Carillion in 2018, InfraRed's asset management team led the project restructuring to successfully resolve all outstanding contractual obligations with the NHS client, replace the facilities management service providers and subsequently remediate outstanding defects. As a result of HICL's ownership, the project has been stabilised and de-risked, and maintains strong relationships with key stakeholders.

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

"This accretive sale of a representative cross-section of HICL's portfolio further demonstrates the disconnect between public and private market valuations for high-quality infrastructure assets. Since 31 March 2023 the Company has realised over £300m from asset disposals demonstrating effective capital recycling while enhancing key portfolio metrics and reducing gearing."

¹ Using Directors' valuation as at 31 March 2023
² Post completion, HICL will retain a 37.5% equity stake in Hornsea II OFTO

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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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