International Public Partnerships Limited (INPP) has announced 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 says that it expects to invest up to £275 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 company says that 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 says that its investment in the GDN companies strengthens its focus on originating regulated assets which deliver long-term, sustainable, inflation-linked revenues. It says that it expects base case returns from this investment at levels which are consistent with its other regulated investments. INPP says that 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 and that further details of INPP’s investment will be provided at that time.
International Public Partnerships joins consortium acquiring a 61% of National Grid’s Gas Distribution Network : INPP