HICL Infrastructure PLC (LON:HICL) has announced that HICL has entered into an agreement to dispose of its entire equity interests in the Bradford Building Schools for the Future Phase 1 and Bradford BSF Phase 2 PFI projects for a total consideration of c. £37m. Together with refinancing proceeds received since 31 March 2023, the sale represents an 8% premium to the Company’s last audited valuation at 31 March 2023. Completion is expected in Q4 2023, subject to customary closing conditions.
HICL initially invested in Bradford 1 in June 2014, and in Bradford 2 in June 2009, acquiring additional stakes in the Projects in 2021 through execution of pre-emption rights. The sale price represents an annualised holding period return for HICL of 11.5% and 14.1%, respectively. This transaction improves portfolio composition, enhancing key portfolio metrics including total return, inflation correlation and asset life, and further enhances HICL’s track record of utilising selective asset realisations to deliver capital growth and market test asset valuations.
Through its ownership, HICL has delivered enhanced community outcomes while creating value for shareholders. InfraRed actively managed Bradford 2 through its construction phase and supported the refinancing of the project in April 2023, sharing outperformance with the Local Authority. HICL has also supported the delivery of key operational variations including the addition of 50 Special Educational Needs and Disabilities places annually for the local community.
Proceeds from the transaction will reduce the drawn balance on the Company’s Revolving Credit Facility (“RCF”). Following completion of the disposal, drawings on the RCF are expected to be c. £330m.
Edward Hunt, Head of Core Income Funds at InfraRed said:
“Selective divestments enhance portfolio composition, provide a valuable source of funding beyond capital markets, and reinforce the value of HICL’s high quality portfolio. This transaction builds on HICL’s long track record of delivering value enhancement through active asset recycling, and we continue to progress disposal opportunities where these deliver shareholder value.”
HICL Infrastructure 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.
