31 March 2022
HICL Infrastructure PLC
“HICL” or the “Company” and, together with its subsidiaries, the “Group”, the London-listed infrastructure investment company managed by InfraRed Capital Partners Limited (“InfraRed” or the “Investment Manager”).
This announcement has been determined to contain inside information for the purposes of the Market Abuse Regulation (EU) No.596/2014 (as incorporated into UK domestic law by the European Union (Withdrawal) Act 2018).
Extraordinary General Meeting for the Proposed Disposal of Queen Alexandra Hospital
Following a competitive auction process, the Board is pleased to announce that HICL has conditionally agreed to dispose its 100% interest in the Queen Alexandra Hospital PFI Project (“QAH”) to InfraRed European Infrastructure Income Fund 4 (“EIIF 4” ) . This disposal is in line with the Company's stated strategy to deliver shareholder value and optimise portfolio composition through periodic disposals. The transaction is accretive to key portfolio metrics.
Proceeds to HICL will be c. £108 m, with profits from the sale representing a 1.5 pence per share increase on NAV relative to HICL's valuation at 30 September 2021.
HICL invested in QAH in 2010. QAH is a flagship, acute public hospital with over 7,200 staff and 1,200 beds, that serves over 675,00 residents across Portsmouth and south-east Hampshire. QAH was built and then managed by Carillion plc. Following the liquidation of Carillion plc in 2018, HICL, via the Investment Manager, assumed responsibility for the construction and facility management risk associated with the project. Between 2018 and 2021, InfraRed transitioned QAH to a new facilities management provider, EQUANS, and finalised the resolution of all the outstanding contractual obligations with the client, the project's lenders and EQUANS. By working collaboratively with all the key project stakeholders, the Investment Manager was able to successfully stabilise and de-risk the project. InfraRed's active asset management strategy for QAH over the last four years is a key contributor of the uplift in NAV per share recognised on disposal. The sale to EIIF4 will see long-term continuity of InfraRed's management of the asset.
The transaction is expected to complete following the receipt of customary approvals and HICL shareholder approval, outlined below. Proceeds from the disposal will be redeployed into HICL's advanced pipeline, as well as used to pay down the Company's revolving credit facility.
The Board is seeking the approval of Shareholders for the proposed disposal as EIIF 4 is a fund managed by InfraRed, the Company's Investment Manager. The proposed disposal is not a related party transaction for the purposes of the Listing Rules; however the Board is asking Shareholders to approve the disposal as a matter of good corporate governance. The proposed disposal is conditional on this shareholder approval at the Extraordinary General Meeting (“EGM”) to be held at Atlantic House, Holborn Viaduct, London EC1A 2FG at 9:30 a.m. on 28 April 2022.
In addition to running a competitive auction process with multiple third-party bidders, the Company and its Investment Manager implemented the “Rules of Engagement”, as detailed in the Company's 2019 Prospectus. These detailed procedures have been established to manage transactions between the Company, the Investment Manager and funds managed by the Investment Manager. The Board has ensured that these procedures have been adopted in connection with the proposed disposal.
The Company has today sent to Shareholders a Circular and Notice of the EGM in respect of the proposed disposal.
Ian Russell, Chairman of HICL, said:
“The disposal of HICL's investment in Queen Alexandra Hospital is a tangible example of the Company's business model in action. HICL, through its Investment Manager InfraRed, seeks to enhance shareholder value in the existing portfolio through active asset management to optimise portfolio performance and composition. The proceeds provide an alternative source of funds to rotate into the Company's advanced pipeline. The Board unanimously recommends that Shareholders vote in favour of this transaction, as all the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares.”
Further details of the proposed disposal and the EGM can be found in the circular, a copy of which will be submitted to the National Storage Mechanism and will shortly be available for viewing online at the following website address: https://data.fca.org.uk/#/nsm/nationalstoragemechanism and from the Company's website , at www.hicl.com .
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