HICL Infrastructure has agreed to dispose of a portfolio of five assets to John Laing. The portfolio is made up of HICL’s entire equity interest in four UK PPP projects; Queens (Romford) Hospital, Oxford John Radcliffe Hospital (“OJR”), Priority Schools North East Batch and South Ayrshire Schools, in addition to half of its investment in the Hornsea II OFTO2.
The total consideration for the transaction is about £204m, which represents a small premium to the last audited valuation for the relevant assets at 31 March 2023. Completion of all five disposals is expected before HICL’s 31 March 2024 year-end. The transaction proceeds will reduce the drawings on the Revolving Credit Facility to about £130m.
The largest of the five assets, OJR, was developed by Carillion plc under the private finance initiative and HICL acquired its interests in 2010 and 2012. Following the liquidation of Carillion in 2018, InfraRed’s asset management team led the project restructuring to successfully resolve all outstanding contractual obligations with the NHS client, replace the facilities management service providers and subsequently remediate outstanding defects. As a result of HICL’s ownership, the project has been stabilised and de-risked, and maintains strong relationships with key stakeholders.
[With HICL Infrastructure trading at more than a 25% discount to NAV, selling a large slice of the portfolio above NAV provides evidence of the accuracy of the NAV calculation and emphasises how daft the discount has become.]
HICL : HICL Infrastructure sells £200m of assets to John Laing