HICL takes stake in Birmingham hospital project

HICL Infrastructure, which invests in infrastructure projects, has taken a sizeable interest in the Birmingham New Hospitals public finance initiative (PFI) project.

The firm is paying £34.6m to buy a 30% stake in the project from Royal Bank Project Investments, a fee which is in line with the current valuations of similar UK PFI projects in the group's portfolio..

The project is a 40 year concession to design, construct, finance and maintain a new acute hospital and six new mental health facilities in Birmingham.

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The new hospital and mental health facilities were built by a joint-venture between Balfour Beatty Construction and Hayden Young under a £553m fixed-price construction contract.

The new buildings have been built in phases over five years. The mental health facilities were handed over in 2008 while the acute hospital was substantially completed and handed over in September 2011, with the remaining works due to be finished in August 2012.

James O'Halloran, Investment Director at InfraRed Capital Partners (HICL's investment adviser) said: "The acute hospital delivered by the project is one of the largest single hospitals in Europe and we look forward to working with all stakeholders to ensure that the final phase of construction is completed successfully and the project continues to perform well."

HICL shares were down 0.23% at 08:37.

BS