TIDMINPP
RNS Number : 2945R
International Public Partnership Ld
08 December 2016
8 December 2016
Consortium TO ACQUIRE 61% INTEREST IN national grid GAS
distRibution
International Public Partnerships Limited, the listed
infrastructure investment company (the 'Company', 'INPP'), is
pleased to announce that it is part of the Quad Gas Group
consortium that has agreed to acquire a 61% interest in National
Grid's gas distribution network ('GDN').
The Company expects to invest up to GBP275 million, with the
remaining risk capital funded by the other consortium partners who
include other leading UK and international institutional investors,
including: Allianz Capital Partners, Dalmore Capital Limited,
Macquarie Infrastructure and Real Assets, CIC Capital Corporation,
Hermes Investment Management and Qatar Investment Authority
(together, the "Consortium").
The GDNs are well-established, predictable, and strongly cash
yielding businesses whose characteristics are consistent with and
complementary to other regulated and non-regulated assets in the
Company's portfolio. These characteristics include:
-- Stable, RPI-linked revenues deriving from a regulated asset
base with long-term cashflows expected to enhance the degree of
inflation linkage inherent in the Company's overall portfolio;
-- The GDNs are critical elements of the UK's infrastructure base;
-- Confidence in a proven, well-established, highly stable and
transparent regulatory regime overseen by Ofgem;
-- A mature underlying asset base with an established operating
history and no exposure to commodity or consumer demand risk;
and
-- The GDNs come with an experienced management team and a
strong partner in National Grid for its remaining 39% interest.
INPP's investment in the GDN companies strengthens the Company's
focus on originating regulated assets which deliver long-term,
sustainable, inflation-linked revenues. This began with INPP's
ongoing investment programme since 2011 in the offshore
transmission (OFTO) sector and has continued with INPP's investment
into the Tideway Tunnel project in 2015. Both of these primary
assets operate in an established, highly-respected and predictable
regulatory regime, overseen by Ofgem and Ofwat, respectively. Since
privatisation in the 1980s, the GDN network has been owned by
National Grid.
The Company expects base case returns from this investment at
levels which are consistent with its other regulated
investments.
The Consortium will now work with National Grid and other
stakeholders to complete the regulatory process necessary to reach
Financial Close, expected to be towards the end of Q1 2017. Further
details of INPP's investment will be provided at that time.
Rupert Dorey, Chairman of International Public Partnership said:
"INPP's participation in the consortium to acquire National Grid's
gas distribution business offers the Company additional
opportunities for highly attractive risk-adjusted returns with
strong inflation protection to compliment those it already
generates from its existing portfolio. The acquisition is fully in
line with our strategy to strengthen the quality of our portfolio
and enhance further the inflation protection it continues to
offer."
For further information:
Erica Sibree +44 (0)20 7939 0558
Amber Fund Management Limited
Nick Westlake/Hugh Jonathan +44 (0)20 7260 1345/1263
Numis Securities
Ed Berry/Mitch Barltrop +44 (0)20 3727 1046/1039
FTI Consulting
Notes to Editors:
About Quad Investments
The consortium is made up of Allianz Capital Partners, Amber
Infrastructure, CIC Capital Corporation, Dalmore Capital, Hermes
Investment Management, Macquarie Infrastructure and Real Assets
(MIRA), and Qatar Investment Authority.
Following acquisition, the business will have the following
ownership structure:
-- National Grid 39.0%
-- Quad Gas Group
o MIRA 14.5%
o CIC Capital 10.5%
o ACP 10.2%
o Hermes 8.5%
o QIA 8.5%
o Amber/INPP 4.4%
o Dalmore Capital 4.4%
Total 100.0%
The Consortium consists of long term investors in the UK's
critical infrastructure with a track record of delivering reliable
services and operational outperformance in regulated industries -
they have proven operational excellence, as well as financial
scale.
Individually they have invested in a multitude of global
projects in the regulated asset environment, including numerous gas
assets such as Open Grid Europe, Gassled and NET4GAS, Czech Gas
Networks, Thyssengas, Wales & West Utilities, and have a
successful track record of investing in the UK's largest critical
infrastructure investments, including Tideway Tunnel, Heathrow,
Thames Water and Porterbrook.
About the Gas Distribution Networks:
National Grid has agreed a sale of a 61% shareholding in its gas
distribution network which consists of four of the eight UK
regional GDN companies which deliver gas from the high pressure
transmission network (also owned by National Grid) across the East
of England, North London, the North West and the West Midlands. The
four GDNs, the subject of this transaction, distribute gas to
approximately half of the country's connected households serving 11
million customers across a network of 131,000km of gas pipeline. As
noted above these GDNs are regulated by Ofgem, the UK's gas and
electricity regulator.
About International Public Partnerships:
International Public Partnerships ('INPP') is a listed
infrastructure investment company which invests in global public
infrastructure projects developed under the public private
partnerships ('PPP'), private finance initiative ('PFI'), regulated
asset and other similar procurement methods.
Listed in 2006, INPP is a long-term investor in 126 social and
transport infrastructure projects, including schools, hospitals,
courts, police headquarters, transport and utility and transmission
projects in the UK, Europe, Australia and North America. INPP seeks
to provide its shareholders with both a long-term yield and capital
growth through investment across both construction and operational
phases typically of 25-40 year concessions.
Amber Infrastructure Group ('Amber') is the Investment Advisor
to INPP and has around 90 dedicated staff who manage, advise on and
originate projects for INPP.
Visit the INPP website at
www.internationalpublicpartnerships.com for more information.
About Amber Infrastructure Group:
Amber is a leading international infrastructure specialist,
providing asset management and investment advisory services in
respect of over GBP6 billion of assets in the UK, Europe, Australia
and North America. Amber's core business focuses on sourcing,
developing, advising on, investing in and managing infrastructure
assets within the utilities, PPP, transport, renewable energy and
regeneration sectors.
Amber provides investment advisory services to International
Public Partnerships
Limited as well as private investment funds, specialising in
urban regeneration. Amber is headquartered in London with offices
in Munich, Sydney, Melbourne and San Francisco and employs over 90
people, making it one of the largest international infrastructure
specialists.
About Allianz / Allianz Capital Partners:
Allianz represents one of the world's strongest financial
communities, offering a broad range of insurance and asset
management services. In 2015, Allianz employed around 142,000 staff
in some 70 countries and achieved total revenues of 125.2 billion
euros and an operating profit of 10.7 billion euros. Allianz Group
managed an investment portfolio of around 640 billion euros.
Additionally our asset managers Allianz GI and PIMCO managed 1.3
trillion euros of third party money. Allianz is active in a wide
variety of sectors including real estate, infrastructure, renewable
energy and equity and debt. Allianz's long-term value strategies
maximize risk-adjusted returns.
Allianz Capital Partners is the Allianz Group's in-house
investment manager for alternative investments. With offices in
Munich, London, New York and Singapore Allianz Capital Partners
manages more than EUR 16 billion of alternative assets. The
investment focus is on infrastructure, renewables as well as
private equity funds. ACP's investment strategy is targeted to
generate attractive, long-term and stable returns while
diversifying the overall investment portfolio for the Allianz Group
insurance companies.
Allianz was part of the consortium investing alongside INPP in
the Tideway Tunnel project.
About Dalmore Capital Limited:
Dalmore Capital Limited ('Dalmore') is an independent UK fund
manager currently managing over GBP2.0 billion for institutional
investors across eleven investment vehicles including
discretionary-managed funds, co-investment accounts and single
account mandates. Dalmore has offices in London and Edinburgh and
invests in lower risk UK infrastructure, in both greenfield and
brownfield assets.
In 2014, Dalmore was appointed as discretionary manager for the
Pensions Infrastructure Platform, a GBP535 million fund established
for long-term investment in operational UK infrastructure assets,
targeting yielding assets with inflation-linked returns.
For the Tideway Tunnel project, Dalmore established a single
purpose fund which secured GBP440 million of commitments, primarily
from leading UK pension funds, to fund its investment and will
establish a similar single-purpose fund for the purpose of
investing in the GDNs.
About CIC Capital Corporation:
CIC Capital Corporation, a wholly-owned direct subsidiary of
China Investment Corporation (CIC), was incorporated in January
2015 with a mandate to specialise in making direct investments to
refine CIC's overall portfolio management and enhance investment on
long-term assets. As CIC's direct investment arm, CIC Capital is
mandated to make direct investments and manage bilateral,
multilateral and platform fund investments to maximize returns and
promote international investment cooperation. CIC Capital is a
market-oriented commercial entity with a global reach.
About Hermes Investment Management:
Hermes is focused on delivering superior, sustainable, risk
adjusted returns for our clients - responsibly. Our goal is to help
people invest better, retire better and create a better society for
all.
Hermes manages assets on behalf of more than 330 clients* across
equities, fixed income, alternatives and real estate, with GBP28.6
billion* assets under management. In Hermes EOS, we have the
industry's leading engagement resource, advising on GBP237 billion*
of assets.
*Please note the total AUM figure includes GBP5.4billion of
assets managed or under an advisory agreement by Hermes GPE LLP
("HGPE"), a joint venture between Hermes Fund Managers Limited
("HFM") and GPE Partner Limited. HGPE is an independent entity and
not part of the Hermes group. GBP0.2billion of total group AUM
figure represents HFM mandates under advice. Source: Hermes as at
30 September 2016.
About Macquarie Infrastructure and Real Assets:
Macquarie Infrastructure and Real Assets ('MIRA'), a division of
the Macquarie group of companies, is the world's largest
infrastructure manager with over GBP70 billion in infrastructure
assets under management across 27 countries and approximately 400
employees globally. In total MIRA has approximately 115
infrastructure assets including more than 40 utilities and energy
related companies under management through a range of listed and
unlisted vehicles globally.
In Europe, MIRAEL has to date raised and invested through five
dedicated European infrastructure funds with equity capital of over
EUR14 billion.
About Qatar Investment Authority:
Qatar Investment Authority ('QIA') is the sovereign wealth fund
of the State of Qatar. QIA was founded in 2005 to strengthen the
country's economy by diversifying into new asset classes. Building
on the heritage of Qatar investments dating back more than three
decades, its growing portfolio of long-term investments help
complement the state's huge wealth in natural resources
Headquartered in Doha, and with a subsidiary in New York (QIA
Advisory), QIA is structured to operate at the very highest levels
of global investing. As a world class investor, QIA adheres to the
strictest financial and commercial disciplines
It has a strong track record of investing in infrastructure and
in the UK as well as in different asset classes, including listed
securities, property, alternative assets and private equity in all
the major capital markets as well as the newer emerging markets
This information is provided by RNS
The company news service from the London Stock Exchange
END
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