REG - HICL Infrastructure - Portfolio Disposal for c. £204m

HICL InfrastructureAnnouncement

28/09/2023 07:00

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RNS Number : 8883N  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 OFTO(2).

 

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 assets(1), 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

 

-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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