(Alliance News) - John Laing Group PLC on Friday said it has agreed to sell its entire 30% stake in a UK rail programme for up to GBP421 million in cash.
The FTSE 250-listed infrastructure investor has entered into an agreement to sell its 30% interest in the InterCity Express Programme Phase 2 to AIP Management PS, a Danish investment company.
The sale consideration represents a strong uplift on the GBP333 million valuation of the stake as at June 30, John Laing noted.
The transaction will complete in two stages. The first stage, which represents the sale of a 15% interest in the rail programme, will generate GBP203.4 million for John Laing. The remaining 15% interest will take place up to 12 months later at John Laing's election and will generate up to GBP217.6 million.
John Laing said it will return 5% to 10% of gross proceeds from the sale to investors on an annual basis, as per the company's dividend policy.
"We continue to make good progress in developing our investment pipeline. The prospects for infrastructure investment are stronger than ever. I am confident that our greenfield investment capability and partner relationships mean that John Laing is ideally placed to capitalise on the opportunities that lie ahead of us," John Laing Chief Executive Officer Ben Loomes said.
The InterCity Express Programme covers the finance, design, manufacture and delivery into daily service and maintenance of a fleet of 122 trains. The contract awarded in 2012 consisted of two phases: IEP West, which John Laing fully realised in 2018, and IEP East, which closed financially in 2014, and covers 65 trains for the East Coast mainline and the construction and refurbishment of four depots.
IEP East, the second phase, has been delivered by Agility Trains East, a consortium formed between Japanese firm Hitachi Ltd and and John Laing.
Shares in John Laing were up 4.4% at 297.32 pence each in London on Friday morning.
By Tapan Panchal; tapanpanchal@alliancenews.com
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