REG - HICL Infrastructure - Disposal and Launch of Share Buyback Programme

HICL InfrastructureAnnouncement

28/02/2024 07:00

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RNS Number : 6954E  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%

 

-ends-

 

Enquiries

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

Edward Hunt

Helen Price

Mohammed Zaheer

 

Brunswick
 
+44 (0) 20 7404 5959 / hicl@brunswickgroup.com
(mailto:hicl@brunswickgroup.com)

Sofie Brewis

 

Investec Bank plc
 
+44(0) 20 7597 4952

David Yovichic

 

RBC Capital Markets
 
+44 (0) 20 7653 4000

Matthew Coakes

Elizabeth Evans

 

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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