TIDMHICL
RNS Number : 7678D
HICL Infrastructure Company Ld
02 May 2017
2 May 2017
HICL Infrastructure Company Limited
Acquisition of a new investment
HICL Infrastructure Company Limited ("HICL" or the "Company"),
the listed infrastructure investment company advised by InfraRed
Capital Partners Limited, is pleased to announce that it has
reached agreement to acquire a 36.6% equity interest in the various
entities that comprise the Affinity Water Group ("Affinity Water")
(including the regulated entity, Affinity Water Limited). HICL is
part of a consortium, alongside DIF Infrastructure and Allianz
Capital Partners on behalf of Allianz Group, which has agreed to
acquire 100% of the equity interest in Affinity Water Acquisitions
(Investments) Limited ("Topco") from Morgan Stanley Infrastructure
and Infracapital. The investment is consistent with HICL's strategy
of investing in assets that are positioned at the lower end of the
risk spectrum in three target market segments: PPPs; regulated
assets; and demand-based assets.
Affinity Water is the largest water-only company in England and
Wales by revenue and population served, with a regulatory capital
value of GBP1.156 billion as at 31 March 2017(1) . It is licenced
under the Water Industry Act 1991 and regulated by Ofwat, and its
principal activities are water supply and distribution and the
construction and maintenance of water supply infrastructure.
Affinity Water serves 1.5 million customers across an area of
approximately 4,515 square km in the south east of England.
HICL's share of the consideration for the acquisition amounts to
approximately GBP269 million. This includes HICL's share of Topco's
commitment to acquire a minority interest in Affinity Water. The
investment will be funded using HICL's cash resources and drawings
from its revolving credit facility and completion is scheduled for
later this month. HICL will have a net funding requirement of
around GBP230m following completion of the acquisition.
If calculated using an asset life of 100 years, the investment
extends the weighted average asset life of HICL's portfolio to 32.2
years(2) . In addition, the portfolio's inflation correlation will
be increased such that a 1% increase in inflation p.a. versus the
base case valuation assumption would result in the total return to
HICL's shareholders increasing by 0.8%(2) p.a.
Tony Roper, Director at InfraRed Capital Partners Limited,
said:
"InfraRed is delighted to have secured this GBP269m investment
in Affinity Water, the largest water-only service company in
England and Wales, for HICL. The investment is in line with HICL's
stated acquisition strategy and supports the delivery of the
Company's investment proposition to produce long-term income for
shareholders from a portfolio of infrastructure investments
positioned at the lower end of the risk spectrum.
The investment in Affinity Water will be accretive to the
existing HICL portfolio in terms of total return, weighted average
asset life and inflation correlation. We look forward to working
with the management team and supporting them to continue to deliver
a high quality service for Affinity Water's customers."
An analyst briefing will be held today and the presentation will
be made available on the Company's website (www.hicl.com)
shortly.
(1) Source: Ofwat published Regulatory Capital Value at 31 March
2017 (March 2016 real prices) indexed in line with RPI between
March 2016 and March 2017, as published by the Office for National
Statistics
(2) Asset life from 31 March 2017, assuming portfolio data at 31
December 2016 (as published in the Company's recent Prospectus
dated 23 February 2017) with the addition of the investment in
Affinity Water. Updated information will be provided on 24 May 2017
when HICL publishes its Annual Results for the year to 31 March
2017.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
-ends-
Enquiries
InfraRed Capital Partners Limited +44 (0) 20 7484 1800
Tony Roper
Keith Pickard
Harry Seekings
Tulchan Communications +44 (0) 20 7353 4200
David Allchurch
Latika Shah
Canaccord Genuity Limited +44 (0) 20 7523 8000
David Yovichic
HICL Infrastructure Company Limited
HICL Infrastructure Company Limited ("HICL" or the "Company",
and together with its subsidiaries the "HICL Group") is a long term
investor in infrastructure assets which are predominantly
operational and yielding steady returns. It was the first
infrastructure investment company to be listed on the London Stock
Exchange. With a current portfolio of 115 infrastructure
investments, HICL is seeking further suitable opportunities, which
are positioned at the lower end of the risk spectrum, in three
target markets segments: PPPs; regulated assets; and demand-based
assets.
Further details can be found on the HICL website,
www.hicl.com.
Investment Adviser (InfraRed Capital Partners)
The Investment Adviser to HICL is InfraRed Capital Partners
Limited ("InfraRed") which has successfully invested in over 200
infrastructure projects since 1997. InfraRed is a leading
international investment manager focused on infrastructure and real
estate. It operates worldwide from offices in London, Hong Kong,
New York, Seoul and Sydney. With over 120 professionals it manages
in excess of USD 9bn of equity capital in multiple private and
listed funds, primarily for institutional investors across the
globe. InfraRed is authorised and regulated by the Financial
Conduct Authority.
The infrastructure investment team at InfraRed consists of 60
investment professionals, all with an infrastructure investment
background and a broad range of relevant skills, including private
equity, structured finance, construction, renewable energy and
facilities management.
InfraRed implements best-in-class practices to underpin asset
management and investment decisions, promotes ethical behaviour and
has established community engagement initiatives to support good
causes in the wider community. InfraRed is a signatory of the
Principles of Responsible Investment.
Further details can be found on InfraRed's website,
www.ircp.com.
Affinity Water
Affinity Water is the United Kingdom's largest water-only supply
company by revenue and population served.
Affinity Water owns and manages the water assets and network in
an area of approximately 4,515km2, split over three regions,
comprising eight separate water resource zones, in the southeast of
England. The company is the sole supplier of drinking water in
these areas.
Affinity Water supplies, on average, 900 million litres of water
a day to over 3.6 million people, serving 1.5 million homes and
businesses, together with operating 98 water treatment works.
Affinity Water has invested significantly to protect the
environment by getting their customers to use less water, reduce
abstraction and renew the network. Affinity Water has dedicated
GBP77 million for the metering programme, GBP22 million to achieve
sustainable abstraction reductions and GBP63 million for mains
renewals and replacements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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