INPP increases Cadent stake – International Public Partnerships Limited has agreed to acquire an additional interest in the Cadent gas distribution network. In March 2017, the Company announced that the Quadgas consortium of which INPP is part had acquired a 61% interest in National Grid’s gas distribution networks. INPP invested £274 million to get a 4.4% stake in the consortium.
The Quadgas consortium is now upping its investment and taking 100% ownership of Cadent. At the same time, INPP is increasing its interest in Cadent to 7.25%, giving it the permanent right to appoint a board director.
INPP will make a third and final investment commitment of between £35m-£40m investment in 2019 as part of this deal. The price for this further acquisition has not been disclosed as they don’t know exactly what it will be yet but INPP confirms that this further investment is forecast to be positive for its current portfolio in terms of discount rate, yield contribution and inflation indexation.
Carillion update
International Public Partnerships says that there has been good progress with the orderly transition of responsibility for facilities management services on the 24 individual facilities (representing c.3% by investment fair value) within the portfolio where subsidiaries of Carillion provided facilities management services.
Services have continued to be provided in line with contract specifications at all the affected facilities and there has been no impact on the availability of the facilities to their public sector users. They believe that there has been no adverse impact on public services as a result.
As at 30 April 2018 services have been transitioned to new providers at 22 facilities (representing c.3% by investment fair value). In the case of 14 of these locations this is on a permanent basis and in the case of 8 facilities this is on an interim basis but with the expectation that the transferee will take a permanent transfer shortly.
At the remaining 2 facilities (representing less than 1% by investment fair value) services continue to be provided via the liquidator for Carillion. At both facilities commercial terms for the transfer have been agreed but local authority consent to the transfer is awaited. At the remaining facilities we understand that an agreement in principle has been reached for transfer but Amber Asset Management Limited (INPP’s managers) are not in charge of the process. All transfers are expected to provide for the continuation of the provision of facilities management services on no worse financial terms than those which applied prior to the collapse of Carillion.
INPP does not expect the costs or any loss of income associated with the collapse of Carillion to exceed £1.5m (which in NAV terms would be approximately one tenth of a penny per share) and will continue to work to reduce this number if possible.
INPP : INPP increases Cadent stake