International Public Partnerships Limited has announced that it has acquired an additional interest in the Wolverhampton Building Schools for the Future (“BSF”) project. INPP will commit a further GBP7.2 million to acquire Carillion Private Finance’s 72% direct investment, growing the Company’s existing 10% investment in the Project to 82%.
The opportunity to acquire the additional interest in the Project was secured through pre-emption rights that INPP gained as part of its ownership of Building Schools for the Future Investments LLP (“BSFI”). INPP acquired BSFI from the Department of Education and Partnerships UK in August 2011. BSFI was an investment delivery vehicle designed to refurbish secondary schools across the country.
The Project comprises two secondary schools, Heath Park Academy in the Fallings Park area and Deansfield Community School in the Wardle area of Wolverhampton. Both schools are a mixture of new build and refurbished pre-existing buildings. Upon completion, the schools will provide greatly enhanced education facilities for over 2,000 secondary school students.
Like the other BSF projects in which INPP invests, the current investment meets INPP’s investment criteria:
— The investment debt is non-recourse at the project level and matched to the life of the Project;
— The Project has a long operational life with the 25 year concession due to expire on the 31 August 2040;
— The investment conforms to the typical UK BSF PFI project funding structure with a well-established and standard form risk framework;
— The Project is operational and yielding and will contribute to INPP’s portfolio return immediately upon acquisition.
The investment has been completed at a projected return that INPP regards as attractive compared to current market conditions.
Rupert Dorey, Chairman of International Public Partnerships, said: “Since 2011, INPP has invested over GBP125 million into the development and refurbishment of over 200 individual schools across the UK through the Building Schools for Future scheme. This demonstrates the attractiveness of the asset class that helps provide our investors with predictable, low-risk and long-term returns as shareholders in our Company. The pre-emption rights secured at the time of the Building Schools for Future acquisition continue to present high-quality investment opportunities which can be executed immediately to the material benefit of the value of our underlying portfolio.”
The BSF programme was an initiative launched in 2004 by the previous government with the aim of rebuilding or re-modelling every secondary school in England over a 20 year period. Although the longer term BSF programme has now been replaced, the schools which were the subject of the original programme continue to be actively developed and managed.
INPP originally invested in the BSF programme when it acquired the government’s interest in the BSFI in August 2011. Since this time, the Company has built up considerable experience in managing investments in schools delivered under PFI and PPP programmes.
INPP tops up Wolverhampton schools investment