International Public Partnerships Regulatory News (INPP)

25 May 2012

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR TO U.S. PERSONS. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE INCLUDING IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA.

This Announcement is for information purposes only and does not constitute an invitation to subscribe for or otherwise acquire or dispose of securities in the Company (defined below) in any jurisdiction. The information contained in this Announcement is for background purposes, is subject to updating and amendment, and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this Announcement or its accuracy or completeness. This Announcement does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any investments nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase shares should be made solely on the basis of the information contained in the Prospectus (defined below) issued by the Company. This document does not constitute a recommendation regarding the securities of the Company.

Placing, Open Offer and Offer for Subscription

Further to the announcement of 8 May, International Public Partnerships Limited ("INPP" or the "Company") is pleased to announce its intention to raise up to £180 million by way of a Placing, Open Offer and Offer for Subscription. The Company yesterday published a prospectus relating to the Issue (the "Prospectus") and will post this, together with a circular and notice of Annual General Meeting (the "Circular"), to shareholders today, as well as making them available on the Company's website (http://www.internationalpublicpartnerships.com).

Unless otherwise defined, capitalised words and phrases in this Announcement shall have the meaning given to them in the Prospectus.

HIGHLIGHTS:

·; Proceeds will be used in repayment of the Company's existing debt facility (currently drawn at £18.1m) and then, to the extent not required for repayment, to acquire Further Investments which may include:

i. Pipeline Investments that are being developed or bid on by the Investment Adviser or the Group with an aggregate investment value estimated at approximately £170 million*;

ii. A number of other projects that Amber and/or the Group are bidding on, developing or are in discussions about; or

iii. Opportunities to acquire investments from third party vendors or where the Group has pre-emption rights.

·; Proceeds are anticipated to be invested within 6-12 months

·; Under the Open Offer, existing Shareholders are entitled to subscribe for New Shares pro rata to their holdings of Ordinary Shares on the basis of 1 New Share for every 6 Ordinary Shares held as at close of business on 23 May 2012

·; The balance of New Shares to be made available under the Issue, together with any New Shares not taken up pursuant to the Open Offer, will be made available for subscription under the Excess Application Facility, the Offer for Subscription and the Placing

·; Estimated Net Asset Value not less than 115.2 pence per Existing Ordinary Share (as at 17 May 2012)**

·; Issue price of 116.25 pence per New Share, representing a discount of 0.6 per cent. to the Closing Price of 116.9 pence per Existing Ordinary Share as at the close of business on 22 May 2012 and a premium of 0.9 per cent. to the estimated NAV per Existing Ordinary Share of 115.2 pence (as at 17 May 2012)

·; All investors on the register as at the record date will be entitled to the dividend distribution in respect of the six months to 30 June 2012 (assuming admission of the New Shares takes place before such dividend is declared). INPP will target a minimum dividend of 6 pence per Ordinary Share for 2012***

·; The Company and the Investment Adviser have agreed that the Base Investment Advisory Fee will, with effect from 30 June 2012, reduce from 1.2 per cent. to 1 per cent. per annum in respect of such part of the Gross Asset Value relating to operational projects that exceed £750 million.

For further information:

Erica Sibree

Amber Fund Management Limited

+44 (0)20 7939 0558

Chris Gook / Nick Westlake

Numis Securities Limited

+44 (0)20 7260 1378/1345

Adam Welham

Barclays

+44 (0)20 7263 2323

Ed Berry / Harry Stein

FTI Consulting

+44 (0)20 7269 7297/7141

Private investors can apply for shares in the Offer through their stockbroker, or one of the following share dealing services:

Expected timetable

Each of the times and dates set out below and mentioned elsewhere in this announcement may be adjusted by the Company, in which event details of the new times and dates will be notified to a Regulatory Information Service. References to a time of day are to London time.

THE COMPANY

The Company is a limited liability, Guernsey incorporated authorised closed-ended investment company. The Company offers Shareholders an exposure to investment in infrastructure assets, particularly those with a public or social character.

The Existing Ordinary Shares are admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities. The Company raised £300 million in its initial public offer (the "IPO") which closed on 9 November 2006. It subsequently raised a further £84 million through the issue of C Shares on 17 April 2008 (which converted into Existing Ordinary Shares on 30 June 2008), £89.3 million through the issue of Ordinary Shares on 28 January 2010, and approximately £76.7 million through tap issues. The Company had a market capitalisation of £624.5 million (as at 22 May 2012), and a NAV of £624.3 million (as at 31 December 2011).

Amber Fund Management Limited (the "Investment Adviser", "Operator" or "AFML"), an investment manager authorised and regulated in the UK by the FSA, acts as investment adviser to the Company and operator of the Partnership.

BACKGROUND TO AND REASONS FOR THE ISSUE

The Directors believe that the Company has the opportunity to invest in further infrastructure investments meeting the Company's investment policies. The Company expects to deploy the Issue proceeds first in repayment of the Company's existing debt facility and then, to the extent not required for repayment, to acquire Further Investments. The Directors believe that the Issue proceeds are likely to be deployed within six to 12 months. The sources of Further Investments may include:

·; Pipeline Investments that are being developed or bid on by the Investment Adviser or the Group with an aggregate investment value estimated at approximately £170 million*. The Company has a right of first refusal to acquire projects fitting its investment criteria disposed of by Amber;

·; A number of other projects that Amber and/or the Group are bidding on, developing or are in discussions about; and

·; Opportunities to acquire investments from third party vendors or where the Group has pre-emption rights.

The Directors believe that the Issue will have the following benefits:

·; The Company will be able to seek to acquire Further Investments (including the Pipeline Investments) that it believes will further diversify the Company's asset base;

·; The Company will be able to repay existing borrowings, which will be available for re-drawing;

·; Existing Shareholders and New Shareholders will have the opportunity to subscribe for further Shares in the Company;

·; The Company's market capitalisation will increase, and secondary market liquidity in the Ordinary Shares is expected to be enhanced; and

·; The Company's fixed running costs will be spread across a wider Shareholder base.

PRINCIPAL TERMS OF THE ISSUE

The Company is targeting a capital raising of up to £180 million (with the ability to increase this by up to 50 per cent.) by way of an Issue of New Shares at an Issue Price of 116.25 pence per New Share, representing a discount of 0.6 per cent. to the Closing Price of 116.9 pence per Existing Ordinary Share as at the close of business on 22 May 2012 and a premium of 0.9 per cent. to the Estimated NAV per Existing Ordinary Share of 115.2 pence (as at 17 May 2012)**.

The Company examined a number of options for raising equity and concluded (on the Sponsor's advice) that the combination of a Placing, an Open Offer and an Offer for Subscription allows Existing Shareholders to participate in the Issue by subscribing for New Shares pursuant to their Open Offer Entitlements on a pre-emptive basis as well as applying for further New Shares under the Open Offer through the Excess Application Facility, while providing the Company with the flexibility to raise the desired quantum of equity capital from new investors via the Placing and Offer for Subscription.

Application has been made for the New Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. The New Shares will rank pari passu in all respects with the Existing Ordinary Shares.

ANNUAL GENERAL MEETING

As the Placing and Offer for Subscription are not on a pre-emptive basis, the Issue is conditional, amongst other things, on the passing of a resolution to disapply the pre-emption provisions in the Company's Articles in relation to the Issue at the Annual General Meeting convened for 21 June 2012. At the Annual General Meeting, certain other resolutions will be proposed, including but not limited to ordinary business, although the Issue is not conditional on those resolutions being passed.

ONGOING COSTS

The Company and the Investment Adviser have agreed that the Base Investment Advisory Fee will, with effect from 30 June 2012, reduce from 1.2 per cent. to 1 per cent. per annum in respect of such part of the Gross Asset Value relating to operational projects (being those projects that have fully completed their construction stages and have been certified as being fully operational by the relevant counterparty and senior lender) that exceed £750 million.

INVESTMENT OPPORTUNITY

An investment in the Company will provide Shareholders with exposure to the PPP/PFI infrastructure asset class and to other infrastructure assets and businesses falling within the Company's investment criteria, which the Directors believe is attractive because of:

·; attractive yields relative to the asset risk profile;

·; likelihood of long-term stable cashflows and growth potential in the asset class;

·; high barriers to entry;

·; predictable, low volatility returns;

·; limited exposure to changes in the business cycle;

·; creditworthy counterparties;

·; the experience and track record of the Amber Infrastructure Team; and

·; the development and origination capacity of Amber and its investment pipeline.

The Company's trading history suggests that market performance of the Company's Shares tends to be relatively uncorrelated with the listed UK equity market generally. An investment in the Company made at the time of the IPO in November 2006 over the period to 22 May 2012 has outperformed the FTSE All Share Index by 29.1 per cent. and the FTSE 250 Index by 8.8 per cent. A Shareholder who acquired Existing Ordinary Shares in the IPO had, at 22 May 2012, seen a total return before tax of 45.2 per cent.****.

INVESTMENT OBJECTIVES AND DIVIDENDS POLICY

The Company will seek to provide Shareholders with long-term distributions at levels that are sustainable and which preserve the capital value of the Group's Investment Portfolio over the long-term. The Directors believe that long-term capital growth can also be achieved.

The Company will target a minimum dividend per annum and will aim to maintain and enhance the level of distributions. The Company's target distribution for 2012 is 6 pence per Ordinary Share***. 

Distributions on Ordinary Shares are expected to be paid twice a year, normally in respect of the six months to 30 June and 31 December by way of dividend.

Where Admission occurs before any dividend is declared in respect of the period to 30 June 2012 the New Shares will be entitled to any distribution that is declared in respect of the six months to 30 June 2012.

The Company will target an IRR equal to or greater than 8 per cent.*** on the IPO issue price of 100 pence per Ordinary Share over the long-term. The Directors believe there are currently opportunities to acquire Further Investments that may enhance the Company's IRR.

SUMMARY INVESTMENT POLICY

The Company's investment policy is to invest in public or social infrastructure assets in the UK, Europe, Australia and North America. The Investment Adviser will also consider investment in other core OECD countries, such as New Zealand, when it considers that the risk profile of a particular opportunity meets the Company's requirements.

The Group intends to continue acquiring both operational and construction phase assets from Amber and/or third parties. The Group intends to hold its investments for the long-term and aims to enhance the capital value of its investments and the income derived from its investments.

The Group intends to acquire Further Investments within any of the following parameters:

·; investments with characteristics similar to the Company's existing assets;

·; investments in assets or concessions having a public infrastructure character and in respect of which availability, property rental, or predictable user demand based payments are or will become payable; and

·; investments in infrastructure assets, businesses or concessions which have high barriers to entry and expect to generate an attractive total rate of return over the life of the investments.

While there are no restrictions in this respect, the Group will, over the long-term, seek a spread of investments geographically and across industry sectors to achieve a broad risk balance in the Investment Portfolio.

THE EXISTING PORTFOLIO

The Existing Portfolio consists of interests in Investment Capital in 15 projects developed under the UK Government PFI scheme; 100 per cent. of Building Schools for the Future Investments LLP ("BSFI", the original holding entity for the UK Government's investments in the Building Schools for the Future programme); 33 projects developed under the UK National Health Service LIFT programme, one PPP project developed under the Scottish government's non-profit distributing public private partnership ("NPD") model, 15 PPP or other-type projects located in Australia, Belgium, Canada, France, Germany, Ireland and Italy; three projects developed under Ofgem's offshore electricity transmission tender process ("OFTOs") and investments in Angel Trains and BeNEX. In addition, the Existing Portfolio includes 100 per cent. of the senior debt interests in two PFI projects in which the Group also holds 100 per cent. of the Investment Capital. The Existing Portfolio consists predominantly of interests in Project Entities which have:

·; direct or indirect entitlement to public sector or government backed revenues;

·; finished construction or are in construction of public or social infrastructure facilities for provision of services relating to health, schools, government offices, courthouses, police and custodial facilities, rail infrastructure and rolling stock, electricity transmission, showgrounds or which are operating transport concessions; and

·; contractual structures that usually provide for the majority of construction and operational project risks to be "passed down" by the Project Entity to subcontractors subject to pre-defined liability caps.

ISIN Numbers

The International Security Identification Number for the New Shares available under the Placing, Open Offer and Offer for Subscription is GB00B188SR50.

The International Security Identification Number for the Open Offer Entitlements is GB00B85M5564.

The International Security Identification Number for the Excess CREST Open Offer Entitlements is GB00B85M6869.

The International Security Identification Number for use by CREST applicants for the Offer for Subscription (if CREST applications are offered in the Company's sole discretion) is GG00B8G02Z83.

Publication of the Prospectus and Circular

A copy of each of the Prospectus and Circular will shortly be submitted to the National Storage Mechanism and will shortly be available for inspection at www.Hemscott.com/nsm.do.

Footnotes:

* The estimated investment value reflects the Directors' current unaudited estimate, based on the advice of the Investment Adviser, of the likely total acquisition price at the expected time of acquisition. It will not necessarily equal the eventual acquisition price for, or the value of, any interest that may be acquired by the Group in relation to such project which will depend on a range of factors.

** The Estimated Net Asset Value is an estimate of the Directors, based on the advice of the Investment Adviser, and based on unaudited financial information of the Group, but using the same methodology as is used for the half-yearly Net Asset Values. This Estimated Net Asset Value and the information that has been used to prepare it has not been audited or reviewed by any person outside the Amber Group other than the Directors. There can be no assurance that the Net Asset Value as at 30 June 2012 will reflect the Estimated Net Asset Value which is prepared as at 17 May 2012.

*** These are targets only and not profit forecasts. There can be no assurance that these targets will be met or that the Company will make any distributions whatsoever.

**** Total shareholder return is capital appreciation of the Ordinary Shares plus cash dividends.

IMPORTANT NOTICES

The potential acquisition by the Company of any of the investments referred to in this Announcement is subject, among other things, to those projects reaching legal completion and to the Company having conducted satisfactory due diligence in relation to such investments. Although the Company has a right of first refusal for investments disposed of by the Amber, any acquisitions will be subject to agreement having been reached between the Company and the relevant counterparty as to the terms of the acquisitions. In addition, some of the investment opportunities are those where Amber and/or the Company are currently undergoing a bidding process. There is no guarantee that they will be successful in any such bidding process. There is therefore no guarantee that any of the investments will be acquired and if they are on what terms. In additions there is no guarantee that suitable further investments will be available following Admission or that any investment will be successful.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made to, or in relation to, and no responsibility or liability is or will be accepted by Numis Securities Limited ("Numis") or Barclays Bank PLC ("Barclays") or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Numis is acting for the Company as sponsor, corporate broker, financial adviser and joint bookrunner and Barclays is acting for the Company as joint bookrunner in relation to the proposed Issue of New Shares pursuant to the Placing, Open Offer and Offer for Subscription. Numis and Barclays are both authorised and regulated by the Financial Services Authority. Neither Numis nor Barclays are acting for anyone else and will not be responsible to anyone other than INPP for providing the protections afforded to their respective clients nor for providing advice in relation to the proposed issue or any other matter referred to herein. To the fullest extent permitted by law recipients agree that neither Numis nor Barclays shall have any liability (direct or indirect) for or in connection with this Announcement or any matters arising out of or in connection herewith. Neither Numis nor Barclays has authorised the contents of, or any part of, this document.

Ordinary Shares to be issued pursuant to the Issue have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or under the applicable state securities laws of the United States, and accordingly, subject to certain exceptions, may not be offered or sold directly or indirectly in or into the United States, or to or for the benefit of any U.S. person (within the meaning of Regulation S under the Securities Act). In addition, the Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended.

The distribution of this Announcement and the placing, open offer and offer for subscription of Ordinary Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Numis or Barclays that would permit an offering of any Ordinary Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company, Numis and Barclays to inform themselves about, and to observe, such restrictions.

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The information contained in this Announcement is subject to change without notice and neither the Company nor Numis nor Barclays assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

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