HICL Infrastructure sells French motorway investment at 20% premium
HICL Infrastructure PLC on Wednesday said it disposed of its stake in a French motorway after holding the investment for almost a decade.
The company sold its 24% stake in the A63 motorway in France through its shareholding in the portfolio company Atlandes SA. The investment used to be its second-largest asset at the time of the first investment in 2017, and made up 8.4% of the portfolio on September 30.
HICL Infrastructure is a London-based closed-ended infrastructure investment company managed by InfraRed Capital Partners Ltd.
Gross proceeds from the sale was £311 million, representing a 21% premium on the most recent valuation of the investment.
The stake was purchased by the majority shareholder of Atlandes, which is Madrid-based Abertis Infraestructuras SA. HICL Infrastructure said all the minority shareholders worked together to allow Abertis to take 100% ownership of Atlandes.
The A63 connects Bordeaux in south west France with the north east Spanish border, tranversing the Landes forest.
The disposal will add 2.2p to net asset value per share for HICL Infrastructure, while increasing the annualised holding period return in excess of the company’s weighted average discount rate, it noted.
NAV per share was 156.0p on September 30 last year, the company’s half-year stage.
The transaction brings HICL’s total divestments to over £1 billion in the past three years at a weighted average premium of 11%, which the company say was driven by the portfolio manager’s active management of capital rotation, and is accretive to the company’s expected return, yield, inflation correlation, and asset life metrics.
The proceeds are expected to be deployed into other investments.
Chair Mike Bane said: ‘This disposal demonstrates once again the quality of HICL’s portfolio and our proven ability to generate value through disciplined asset rotation in all market conditions.
‘Looking forward, the board sees significant opportunity to invest the proceeds into currently available investment opportunities, where these enhance HICL’s strategic priorities and the expected returns exceed the hurdle set by share buybacks.’
The transaction is not subject to any consents and will be completed later on Monday.
HICL Infrastructure expects to have a cash balance of about £90 million, and no drawings under its revolving credit facility at the end of the month. It added that it will allocate £66 million to fund existing equity commitments to the Blankenburg tunnel and the B247 due later this year.
HICL Infrastructure shares were up 3.5% to 118.40 pence on Wednesday morning in London.
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