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HICL Infrastructure selling Highland Schools Project for £56m
Listed infrastructure investment company HICL Infrastructure Company announced on Monday that it has entered into an agreement to divest its 100% equity and subordinated debt interest in the Highland Schools PPP2 Project for £56.2m.
The FTSE 250 company said the disposal was expected to complete during July 2018.
It said it had sought and received offers for its interest in Highland Schools in March, which were analysed by its adviser InfraRed and represented "significantly greater" value than could be achieved by retaining the investment.
The disposal would accretive in terms of the total return, inflation correlation and weighted average asset life of the portfolio once the disposal has completed.
HICL said the profit on disposal, after costs, represented a premium of £9.7m over the directors' valuation of £46.5m as at 30 September last year.
The company expected to redeploy the proceeds into accretive investments, with the board saying it would consider further selective disposals as a means of managing its overall funding position.
"The disposal of HICL's investment in Highland Schools PPP2 is a tangible example of the company's business model in action," said Harry Seekings, a director at InfraRed Capital Partners.
"The board and InfraRed seek opportunities to enhance value in the existing portfolio and this includes optimising portfolio performance through accretive disposals."
Seekings said finding additional value for HICL shareholders was a priority for both the board and InfraRed and, in this case, it had received an offer in excess of the value that could be achieved by retaining the investment within the portfolio.
"The profit generated supports the directors' approach to the valuation of HICL's portfolio and the steadfast approach taken to enhancing shareholder value."