REG - HICL Infrastructure - Acquisition – First Fibre Broadband Investment

HICL InfrastructureAnnouncement

19/05/2022 07:00

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RNS Number : 0239M  HICL Infrastructure PLC  19 May 2022

19 May 2022

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").

 

Acquisition Activity - First Fibre Broadband Investment

The Board is pleased to announce that HICL has acquired its first fibre
broadband investment through the acquisition of a 55% shareholding in ADTIM
SAS ("ADTIM" or "the Project") in France from DIF Capital Partners from its
DIF CIF I fund. Following completion, ADTIM will represent approximately 2% of
HICL's portfolio, by value(1). This is HICL's first fibre broadband investment
and the third fibre broadband investment made by InfraRed-managed funds in
Europe.

ADTIM is an independent wholesale fibre network providing low density rural
areas in the South of France with 18,300km of critical fibre-to-the-home
("FTTH") broadband infrastructure. Procured under France's 2012 Ultra-Fast
Broadband Plan, ADTIM is the sole wholesale provider of this subsidised rural
network, with pricing regulated by ARCEP, the French telecom regulator. This
essential infrastructure benefits from long-term predictable cash flows and
high barriers to entry, placing the asset at the lower end of the
infrastructure risk spectrum. The investment is accretive to key portfolio
metrics.

ADTIM has been awarded two concession contracts by the local authority, under
the French Public Initiative Networks ("PIN") scheme, to operate two
infrastructure networks providing broadband access to telecom operators
serving the residential and business retail markets in the Drôme and Ardèche
area:

·    PIN 1: 2,300km of fibre under a 25-year concession awarded in 2008,
which has been fully operational since 2011; and

·    PIN 2: 16,000km of fibre in 640 municipalities, under a 19-year
concession awarded in 2016 to deploy and operate c. 350k FTTH lines by 2025.
This PIN remains in deployment phase ('roll-out') with delivery obligations to
remain with the local authority.

ADTIM's network is run by one of the largest wholesale operators in France,
Axione, a subsidiary of Bouygues Energies & Services ("BYES"), part of the
Bouygues SA Group. Axione manages c. 20% of all FTTH PIN areas in France and
operates across the full fibre value chain from design to roll-out to
operations, in both France and the UK.

ADTIM earns wholesale revenues generated from the sale of its broadband and
network services to Internet Service Providers such as Free, Bouygues Telecom,
Orange and SFR under an ARCEP-regulated tariff. Operating costs are largely
contracted under long-term contracts with Axione. As indicated above, a
portion of the network is subject to further roll-out, scheduled for
completion in 2025. The local authority bears the full risk of construction
and delivery of the lines under the concession contract.

InfraRed was supported on the acquisition of ADTIM by Olivier-Marie Racine,
from InfraRed's network of senior advisers. Olivier-Marie was the CEO of BYES
until 2020, where he oversaw the development and operation of the Axione
business. Olivier-Marie will sit alongside members of InfraRed's asset
management team in representing HICL's interests on the board of ADTIM.

ADTIM is the third fibre broadband investment made by InfraRed-managed funds
in Europe since 2020. InfraRed has been specifically exploring the French
fibre market for HICL for the past two years, owing to its maturity, regulated
framework and concession-based delivery model, positioning the sector at the
lower end of the infrastructure risk spectrum.

Completion of the transaction is expected in Q3 2022 following customary
third-party consents. The investment will be funded from HICL's existing
credit facilities.

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

"InfraRed is delighted to have secured HICL's first digital communications
investment. ADTIM fits with HICL's vision by connecting underserved
communities with fibre broadband; linking people to employment, education and
each other. Providing essential public services, with long-term, predictable
revenues generated under a regulated tariff, ADTIM is a prime example of core
infrastructure of the modern economy."

 

1.     By value, at 30 September 2021, using the Directors' Valuation

 

-ends-

 

Enquiries

InfraRed Capital Partners
Limited                            +44 (0) 20 7484
1800 / info@hicl.com (mailto:info@hicl.com)

Harry Seekings

Edward Hunt

Helen Price

Kirsty MacCallum

 

Teneo
                           +44 (0) 20 7420 3169/ HICL@teneo.com
(mailto:HICL@teneo.com)

Haya Herbert-Burns

Matthew Thomlinson

Jesse Mathews

 

Investec Bank plc
              +44(0) 20 7597 4952

David Yovichic

 

RBC Capital Markets
           +44 (0) 20 7653 4000

Matthew Coakes

 

Aztec Financial Services (UK) Limited
+44(0) 203 818 0246

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
(http://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
(http://www.ircp.com/) .

 

 

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