HICL purchases PFI project from Balfour Beatty - UPDATE

published 1 May 2013

HICL Infrastructure has completed the acquisition of a 50 per cent equity and loan note interest in the Tameside General Hospital private finance initiative (PFI) project from Balfour Beatty.

The £78m project was sold for £16m, generating a gain on disposal of £9.0m for Balfour. It reached final close in September 2007 and is for a term of around 34 years.

The transaction brings HICL's total number of infrastructure investments to 82.

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Tony Roper, Director of InfraRed Capital Partners, HICL's Investment Adviser, said: "We are pleased to have completed this acquisition which was identified as part of the group's pipeline of new investment opportunities at the time of the company's recent successful equity capital raising.

"InfraRed Capital Partners has worked with Balfour Beatty on a number of infrastructure projects in the UK. We look forward to working alongside our co-shareholder and supply chain to provide quality serviced facilities to the trust."

Balfour Beatty also announced the sale of its 50% interest in four PFI school projects in Birmingham, Bassetlaw, Stoke and Rotherham to its co-shareholder, Innisfree, for combined proceeds of £42.5m, generating a gain on disposal of £24.4m.

As such it generated total procees of £58.5m, exceeding the directors' valuation by £21.9m.

Chief Executive Andrew McNaughton, said: "Balfour Beatty's ability to deliver long-term projects has enabled us to deliver superior returns from our equity investments while delivering a first class service to the public sector.

"The transactions we have completed demonstrate the quality and liquidity of our portfolio and are in line with our strategy to generate income from our Infrastructure Investments business through disposals, thereby releasing cash for future investments and delivering value for our shareholders."

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