International Public Partnerships, the listed infrastructure investment company (LON:INPP), announced that it will invest up to £12.4 million of additional risk capital in the Midlands Batch Priority Schools Project (‘the Project’) as part of a successful recapitalisation of the Project.
The Company has been a lender to the Project since March 2015 when its senior debt requirements were originally funded by the Aggregator Vehicle plc (the ‘Aggregator’). The Aggregator was set up to combine lending from the European Investment Bank (46%), Aviva Annuity UK Limited (46%) and the Company (8%) to fund five batches of new schools making up the Priority Schools Programme sponsored by the Department for Education.
Members of the Carillion Group were one of the original equity sponsors to the Project, and also provided construction and facilities management services to it. As reported on 8 September 2018, at the time of Carillion plc’s liquidation, a sports hall and some post-completion external works at five of the eight schools in the fourth batch had yet to be completed. All schools which are part of the Project have remained open and continue to operate in line with expectations.
The Company’s Investment Adviser, Amber Infrastructure Group (‘Amber’), has actively engaged over the last six months with its lender partners, the Department for Education, Infrastructure and Projects Authority (IPA), the replacement facilities management service partner and the affected schools to resolve the outstanding works. As a result, the Company has agreed with the other Aggregator lenders, the Department for Education, IPA, and other stakeholders to make the investment needed to fund the project to complete the works, remedy defects and finance its operations. A new construction partner will be appointed as part of the restructure and recapitalisation with completion of outstanding works due by the end of 2019.
The additional investment is being made on commercial terms and is projected to provide returns in line with similar investments in the Company’s portfolio. The completion of the outstanding works will also result in an improved environment for all of the teaching staff and students at the affected schools and is expected to place the Project on a sound financial footing to deliver the services required over the remaining 22 years of the operational contract.
About International Public Partnerships (INPP):
International Public Partnerships (‘INPP’) is a listed infrastructure investment company which invests in global public infrastructure projects and businesses, which meets societal and environmental needs, both now, and into the future.
INPP is a responsible, long-term investor in 130 infrastructure projects and businesses, including utility and transport businesses, transmission projects, schools, courts and police headquarters in the UK, Europe, Australia and North America. INPP seeks to provide its shareholders with both a long-term yield and capital growth.
Amber Infrastructure Group (‘Amber’) is the Investment Adviser to INPP and consists over 120 staff who are responsible for the management of, advice on and origination of infrastructure investments.
