BBGI Global Infrastructure Regulatory News (BBGI)

30 June 2017

BBGI SICAV S.A.

Agreement to invest in five existing PPP projects and gain access to a robust pipeline of future PPP projects in Canada

BBGI SICAV S.A. (LSE ticker: BBGI) is delighted to announce that it has signed a strategic agreement with a subsidiary of SNC-Lavalin Group Inc. (TSX ticker: SNC) ("SNC-Lavalin") to invest in an investment vehicle ("Partnership") which will hold substantial equity interests in five PPP projects in Canada. All assets are operational and classified as availability-based under the investment policy of the Company.

Furthermore, as part of the transaction and through the Partnership, BBGI will benefit from a vend-in (pipeline) agreement that provides the Partnership a right of first offer with respect to the potential future acquisition, of select interests in SNC-Lavalin's robust pipeline of Canadian availability-based PPP projects currently under construction, which is expected to create additional investment opportunities once the assets become operational.

SNC-Lavalin, with a market capitalisation of approximately CA$8 billion (approximately £4.75 billion), is the largest engineering company in Canada, one of the leading engineering and construction groups in the world and a major player in the ownership of infrastructure. Founded in 1911, it is a leader in the PPP market in Canada and has over the years built up an extensive portfolio of PPP assets.

In addition, BBGI is pleased to announce that it has increased the total commitment amount available under its existing credit facility with ING Bank and KfW IPEX-Bank from £110 million to £180 million, which will leave approximately £155 million available to be drawn. The margin on the £70 million commitment increase will be unchanged at 185 bps.

To facilitate the holding of the five project interests and such future acquisitions, a Partnership has been established in which BBGI and SNC-Lavalin will hold 80 per cent. and 20 per cent. partnership interests, respectively, while a subsidiary of SNC-Lavalin will act as the Partnership GP.

At closing of the initial seed assets, the Partnership will acquire holdings in the following operational assets currently held by SNC-Lavalin:

- William R. Bennett Bridge (Kelowna, B.C.);

- Southeast Stoney Trail (Calgary, Alberta);

- Restigouche Hospital Centre (Campbellton, New Brunswick); and

- Canada Line (Vancouver, B.C.)

The acquisition of the interests in the four operational seed assets described above is expected to close in the coming months. As a second stage, and subject to a number of project-specific conditions precedent being satisfied, it is expected that the Partnership will acquire a holding in the McGill University Health Centre ("MUHC") currently held by SNC-Lavalin.

The agreed total cash consideration payable by the Company for the five initial project interests is expected to be approximately CA$208 million, which will be funded from the Company's existing cash resources and drawings under its extended credit facility.

Duncan Ball, Co-CEO said:

"We are delighted to enter into this partnership with SNC-Lavalin that will give us the opportunity to invest alongside SNC-Lavalin in five high quality PPP projects and future potential to invest in its highly desirable pipeline of development-stage PPP projects. SNC-Lavalin has been a leader in the PPP market in Canada for many years and we are excited to be able to invest in the projects it develops."

Frank Schramm, Co-CEO added:

"This transaction is being made on accretive terms. All of the investments in our portfolio remain low risk, availability-based projects and this transaction follows our purist approach to investing in PPP/PFI projects."

Notes for Editors

The William R. Bennett Bridge is a 2 km corridor that straddles Okanagan Lake to connect two communities, Kelowna and West Kelowna, in the interior of British Columbia. The project became operational in 2008 and the concession runs until 2035. Availability payments are received from the Province of BC (AAA rated by S&P). SNC-Lavalin owns 100% of the project equity.

Canada Line is a 19.5 km automated rail-based rapid transit service connecting downtown Vancouver with Richmond and the Vancouver International Airport. The project became operational in 2009 and the concession runs until 2040. Availability payments are received from Translink (Aa2 rated by Moody's). SNC-Lavalin owns 33.3% of the project equity.

Southeast Stoney Trail is a 25 km highway that is part of the Calgary Ring Road network. The project became operational in 2013 and the concession runs until 2043. Availability payments are received from the Province of Alberta (AA+ rated by S&P). SNC-Lavalin owns 50% of the project equity.

Restigouche Hospital Centre is a 33,500 m2 hospital with 140 beds located in Campbellton, New Brunswick. The project became operational in 2013 and the concession runs until 2044. Availability payments are received from the Province of New Brunswick (A+ rated by S&P). SNC-Lavalin owns 100% of the project equity.

McGill University Health Centre ("MUHC") is a 214,000 m2 hospital with 500 private patient rooms located in Montreal, Quebec. The project became operational in 2014 and the concession runs until 2044. Availability payments are received from MUHC, which is rated A (high) by DBRS. SNC-Lavalin owns 60% of the project equity.

BBGI currently owns a portfolio of 39 infrastructure assets. These projects are PPP assets and are supported by contracted, public sector-backed revenue streams, with inflation-protection characteristics.

Further information about BBGI is available on its website at www.bb-gi.com. 

Any reference to the Company or BBGI refers also to its subsidiaries (where applicable).

For further information, please contact:

BBGI Management Team +352 2634791

Duncan Ball

Frank Schramm