REG - HICL Infrastructure - Incremental Investment in A63 Motorway for c. £20m

HICL InfrastructureAnnouncement

21/12/2023 07:15

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RNS Number : 5270X  HICL Infrastructure PLC  21 December 2023

21 December 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".

 

        HICL acquires additional stake in French toll road for c. £20m,
bringing total interest to 24%

·    Additional 3.1% interest acquired in A63 Motorway for c. £20m on
highly accretive terms

·    Total return and yield significantly in excess of the bar set by
alternative uses of capital

·    Continued focus on disciplined balance sheet management, with live
disposal activity

The Board is pleased to announce that HICL has agreed to acquire a further
3.1% interest in the A63 Motorway concession (the "A63") in France for c.
£20m from a co-shareholder. Completion is expected in early 2024, subject to
customary third-party consents.

The asset is a 40-year toll-road concession to design, upgrade, finance,
operate and maintain a 104km section of the existing A63 between Salles and
Saint-Geours-de-Maremne, in southwest France. The A63 benefits from its
strategic positioning as an important trans-European transport corridor, which
has resulted in historically resilient traffic performance. HICL first
invested in the A63 in 2017, and InfraRed's management of the asset dates back
to 2011. Following this incremental investment, HICL will hold a 24% interest
in the asset.

In line with the Board's disciplined approach to capital allocation, this
acquisition was carefully evaluated against alternative uses of capital,
including the repurchase of the Company's shares. The Board is satisfied that
the expected return and yield from this incremental investment are
significantly in excess of the relevant hurdles and presents a unique
opportunity to increase HICL's investment in a high-performing quality asset.

The acquisition will be funded from the proceeds of the recently announced
disposals. Once the announced disposals have completed, HICL's revolving
credit facility ("RCF") is forecast to be c. £135m drawn. The Company
continues to benefit from live disposal activity as part of HICL's active
approach to enhancing portfolio composition through asset rotation.

Mike Bane, Chair of HICL, said:

 "This attractive incremental investment for HICL aligns with the Board's
strict capital allocation framework. It provides greater accretion than
alternative uses of capital and the investment has a well-understood risk
profile. Highly disciplined balance sheet management remains a priority for
the Board, including the reduction of RCF drawings over time."

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

"We are pleased to have increased HICL's stake in this high-quality European
transport link, which InfraRed has successfully managed for over ten years.
While the bar for acquisitions remains high, incremental investments such as
this demonstrate the attractive risk and reward dynamic that can be captured
by nimble investors in the current market in specific circumstances."

-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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