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2 Sep 2009 09:02
HSBC Infrastructure Company Limited
2 September 2009
Acquisition of 34% interest in Bradford Schools Project
HSBC Infrastructure Company Limited ("HICL"), the listed infrastructure investment company, announces today that Integrated Bradford, a Consortium that includes HICL, has reached financial close on the £230 million Bradford Schools Phase 2 PFI Project. HICL has a 34% interest in the project and a funding commitment of £7.4m, the majority of which is a subscription obligation payable at the end of the construction period in early 2011.
The scheme, which is part of the Bradford 'Building Schools for the Future' Programme, is for the provision of four Secondary Schools for Bradford Metropolitan District Council. The four modern campus environments also comprise four smaller schools and will provide dedicated learning for students with special educational needs. Design and construction of the schools will be provided by a joint venture between Costain and Ferrovial Agroman. Amey Communities will undertake the Facilities Management Services and provide the Information and Communications Technology. Construction has already commenced on the schools through an early works agreement with the Council.
Building Schools for the Future is a £45 billion government initiative to modernise England's secondary school estate by refurbishing or rebuilding every school within the next ten years. Bradford BSF was one of the pathfinder projects, in which the development of new schools is undertaken by a Local Education Partnership that includes Bradford MDC, Costain, Amey and Building Schools for the Future Investments.
Today's announcement marks HICL's third investment in a schools project since March. In June, the Group acquired a 30% interest in the Renfrewshire Schools project for £6.8 million. That project comprises ten primary and secondary schools, all located in Renfrewshire. In early July, the Group acquired a 50% interest in the second Highland Schools PPP project for a consideration of £16.8 million. The 30-year, all new build concession comprised five primary schools, three secondary schools, a combined primary and secondary school, and a special needs school.
Tony Roper, Director, HSBC Specialist Fund Management Limited, HICL's Investment Adviser, said: "We are pleased to have the opportunity to participate in this PPP project which is in line with our strategy of investing in low-risk availability-based assets with long term contracts.
By investing during the construction phase, we are seeking to generate additional capital growth as the project is completed in 18 months time and becomes operational. This is in line with our acquisition strategy set out in our 31 March 2009 results. Investment in this project does not affect our ability to continue the Company's stated dividend policy.
We look forward to working with the consortium and the client to ensure this project is built successfully for the benefit of the local community."
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M:Communications +44 (0)20 7920 2323/2359
Ed Orlebar/James Hill
HSBC Infrastructure Company Limited
The Company is a long term investor in infrastructure projects which are predominantly in their operating phase and yielding steady returns. It was the first infrastructure investment company to be listed on the London Stock Exchange. With the acquisition of the interest in the Bradford Schools Phase 2 Project, the Company now owns a portfolio of 31 infrastructure projects. None of the investments in the portfolio are a demand-based income project (whose revenue is dependent on the amount of usage).
The Company was launched in March 2006 with 15 assets of which 10 were operational, with the remainder in their construction phases. The Company continues to seek further suitable investment opportunities in line with its strategy set out in the Company's results announced on 28 May 2009.
Further details of the Company can be found from its web site www.hicl.hsbc.com
Investment Adviser
The Investment Adviser to the Company is HSBC Specialist Fund Management Limited, whose infrastructure investment team has successfully invested in infrastructure projects since 1997 and which is part of HSBC Specialist Investments ("HSIL"), the infrastructure and real estate investment arm of the HSBC Group. HSBC Specialist Fund Management Limited is authorised and regulated by the Financial Services Authority.
HSBC Infrastructure Fund II, a private equity infrastructure fund managed by HSIL's infrastructure team invested in 2006 in Phase 1 of the Bradford BSF programme.