(Alliance News) - HICL Infrastructure PLC on Thursday said it plans to raise funds in a share issue at a 6% discount, while saying the performance of its demand-based assets, such as toll roads, has rebounded since travel restrictions have been lifted.
The issue price of 164.00 pence represents a 5.8% discount to Wednesday's closing price of 174.0p. Shares in the FTSE 250-listed infrastructure investor were trading 3.3% lower at 168.35p each on Thursday morning in London.
HICL said the new cash will be used to reduce its funding requirement by around GBP75 million and to provide resources for its pipeline of investments.
Investec Bank PLC and RBC Capital Markets are acting as joint brokers for the share offer.
Turning to its trading from April 1 to July 15, HICL said most assets in its portfolio of 118 investments in the UK, continental Europe and North America have been relatively unaffected by the Covid-19 pandemic. However, it noted that three demand-based assets - two toll roads and the HS1 rail link - had seen a fall in demand since March.
Traffic on the A63 motorway in France is running at 8% below expectations, having been 36% below expectations for the three months ended June 30. The equivalent figures for the NorthWest Parkway in Denver are worse at 44% and 59%. Activity on the Channel tunnel rail link, HS1, is 14% below normal and was 14% below normal throughout the second quarter.
"I am pleased with the solid progress the company has made in the period, in both the management of the existing portfolio and the execution of its investment strategy. There is continued market appetite for high quality, core infrastructure assets," said Chair Ian Russell.
"Operational performance of HICL's demand-based assets has been reassuring in the context of the gradual easing of travel restrictions. Revenue on the toll roads is ahead of expectations at the current time, underlining that these investments benefit from strategically important positioning in their respective regions."
HICL reaffirmed its target dividend guidance of 8.25p per share for financial 2021, ending March 31.
Looking ahead, the infrastructure investor said that while Covid-19 related uncertainty continues to create volatility in financial markets, the resumption of transaction activity in the sector demonstrates continued investor appetite for core infrastructure assets. It said it will therefore continue to pursue acquisitions and execute on its pipeline focused on its core geographies in UK, Europe, North America and Australia and New Zealand.
By Ife Taiwo; ifetaiwo@alliancenews.com
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HICL Infrastructure (HICL)