HICL Infrastructure Regulatory News (HICL)

31 March 2022

HICL Infrastructure PLC

"HICL" or the "Company" and, together with its subsidiaries, the "Group", the London-listed infrastructure investment company managed by InfraRed Capital Partners Limited ("InfraRed" or the "Investment Manager").

This announcement has been determined to contain inside information for the purposes of the Market Abuse Regulation (EU) No.596/2014 (as incorporated into UK domestic law by the European Union (Withdrawal) Act 2018).

Extraordinary General Meeting for the Proposed Disposal of Queen Alexandra Hospital

Following a competitive auction process, the Board is pleased to announce that HICL has conditionally agreed to dispose its 100% interest in the Queen Alexandra Hospital PFI Project ("QAH") to InfraRed European Infrastructure Income Fund 4 ("EIIF 4"). This disposal is in line with the Company's stated strategy to deliver shareholder value and optimise portfolio composition through periodic disposals. The transaction is accretive to key portfolio metrics.

Proceeds to HICL will be c. £108m, with profits from the sale representing a 1.5 pence per share increase on NAV relative to HICL's valuation at 30 September 2021.

HICL invested in QAH in 2010. QAH is a flagship, acute public hospital with over 7,200 staff and 1,200 beds, that serves over 675,00 residents across Portsmouth and south-east Hampshire. QAH was built and then managed by Carillion plc. Following the liquidation of Carillion plc in 2018, HICL, via the Investment Manager, assumed responsibility for the construction and facility management risk associated with the project. Between 2018 and 2021, InfraRed transitioned QAH to a new facilities management provider, EQUANS, and finalised the resolution of all the outstanding contractual obligations with the client, the project's lenders and EQUANS. By working collaboratively with all the key project stakeholders, the Investment Manager was able to successfully stabilise and de-risk the project. InfraRed's active asset management strategy for QAH over the last four years is a key contributor of the uplift in NAV per share recognised on disposal. The sale to EIIF4 will see long-term continuity of InfraRed's management of the asset.

The transaction is expected to complete following the receipt of customary approvals and HICL shareholder approval, outlined below. Proceeds from the disposal will be redeployed into HICL's advanced pipeline, as well as used to pay down the Company's revolving credit facility.

The Board is seeking the approval of Shareholders for the proposed disposal as EIIF 4 is a fund managed by InfraRed, the Company's Investment Manager. The proposed disposal is not a related party transaction for the purposes of the Listing Rules; however the Board is asking Shareholders to approve the disposal as a matter of good corporate governance. The proposed disposal is conditional on this shareholder approval at the Extraordinary General Meeting ("EGM") to be held at Atlantic House, Holborn Viaduct, London EC1A 2FG at 9:30 a.m. on 28 April 2022.

In addition to running a competitive auction process with multiple third-party bidders, the Company and its Investment Manager implemented the "Rules of Engagement", as detailed in the Company's 2019 Prospectus. These detailed procedures have been established to manage transactions between the Company, the Investment Manager and funds managed by the Investment Manager. The Board has ensured that these procedures have been adopted in connection with the proposed disposal.

The Company has today sent to Shareholders a Circular and Notice of the EGM in respect of the proposed disposal.

Ian Russell, Chairman of HICL, said:

"The disposal of HICL's investment in Queen Alexandra Hospital is a tangible example of the Company's business model in action. HICL, through its Investment Manager InfraRed, seeks to enhance shareholder value in the existing portfolio through active asset management to optimise portfolio performance and composition. The proceeds provide an alternative source of funds to rotate into the Company's advanced pipeline. The Board unanimously recommends that Shareholders vote in favour of this transaction, as all the Directors intend to do in respect of their own beneficial holdings of Ordinary Shares."

Further details of the proposed disposal and the EGM can be found in the circular, a copy of which will be submitted to the National Storage Mechanism and will shortly be available for viewing online at the following website address: https://data.fca.org.uk/#/nsm/nationalstoragemechanism and from the Company's website, at www.hicl.com.

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Enquiries

InfraRed Capital Partners Limited +44 (0) 20 7484 1800 / info@hicl.com

Harry Seekings

Edward Hunt

Helen Price

Kirsty MacCallum

Teneo +44 (0) 20 7420 3169 / HICL@teneo.com

Haya Herbert-Burns

Matthew Thomlinson

Jesse Mathews

Investec Bank plc +44(0) 20 7597 4952

David Yovichic

RBC Capital Markets +44 (0) 20 7653 4000

Matthew Coakes

Aztec Financial Services (UK) Limited +44(0) 203 818 0246

Chris Copperwaite

Sarah Felmingham

HICL Infrastructure PLC

HICL Infrastructure PLC ("HICL") is a long-term investor in infrastructure assets which are predominantly operational and yielding steady returns. It was the first infrastructure investment company to be listed on the London Stock Exchange.

With a current portfolio of over 100 infrastructure investments, HICL is seeking further suitable opportunities in core infrastructure, which are inherently positioned at the lower end of the risk spectrum.

Further details can be found on the HICL website www.hicl.com.

Investment Manager (InfraRed Capital Partners) 

The Investment Manager to HICL is InfraRed Capital Partners Limited ("InfraRed") which has successfully invested in infrastructure projects since 1997. InfraRed is a leading international investment manager, operating internationally from offices in London, New York, Seoul and Sydney and managing in excess of USD 12 billion of equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed is authorised and regulated by the Financial Conduct Authority.

The infrastructure investment team at InfraRed consists of over 100 investment professionals, all with an infrastructure investment background and a broad range of relevant skills, including private equity, structured finance, construction, renewable energy and facilities management.

InfraRed implements best-in-class practices to underpin asset management and investment decisions, promotes ethical behaviour and has established community engagement initiatives to support good causes in the wider community. InfraRed is a signatory of the Principles of Responsible Investment.

Further details can be found on InfraRed's website www.ircp.com.