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
Edward Hunt
Helen Price
Mohammed Zaheer
Brunswick
+44 (0) 20 7404 5959 / 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.
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.