Acquisition of Additional Int

RNS Number : 6787A

International Public Partnership Ld

13 October 2009

 



13 October 2009

Acquisition of an additional interest in Diabolo Rail Project

International Public Partnerships Limited ("the Company") is pleased to advise that it has secured an additional 10% interest in the Diabolo rail project in Brussels, Belgium. The additional stake brings the Company's total interest in the project to 75%. The remaining 25% interest is owned by the project lender, HSH Nordbank. The purchase price (including costs) of £3.0 million will be funded from the Company's existing cash balance. Construction of the project is scheduled for completion mid-July 2012 and concession expiry is 2047.

The Company negotiated to acquire the stake from Babcock & Brown at original investment cost, or par value, which has the effect of increasing the overall projected IRR on the Company's investment in Diabolo to 12.5%, well above the target level of return for the Company. In addition to the project being immediately accretive to the portfolio, it also meets the Company's other key investment criteria including:

• Project revenues linked to inflation (Belgium CPI)

• Project revenues contracted by Infrabel, the state owned rail infrastructure manager

• Majority ownership and influence over project operations, including Board representation and asset management 

• Debt facility in place, and 100% swapped at a fixed rate for the life of the concession.

The project has been overseen by members of the Company's 16-strong asset management division since the initial investment in 2007, and requires no additional management resource despite the incremental revenue.

Giles Frost, Director of the Company said: "We are pleased to acquire an additional stake in an asset that we have overseen for two years and is currently performing well. The acquisition is demonstrably accretive for INPP. In addition, Amber is reviewing a number of other opportunities for the benefit of the Company. This is a very exciting time for INPP to acquire PPP assets at attractive prices."

For further information:

Bianca Francis                                                                            [phone]

Amber Fund Management Limited                

Nick Westlake                                                                             [phone]

Numis Securities    

 

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