HICL Infrastructure PLC (LON:HICL) has agreed to dispose of a portfolio of seven UK PPP assets to APG, the largest Dutch pension services provider, for a total consideration of c. £225m.
Portfolio sale for c. £225m
| · | Portfolio sale of seven UK PPP assets in line with HICL’s 31 March 2025 valuation |
| · | Proceeds to fund previously announced £150m share buyback programme and outstanding equity commitments |
| · | Brings total asset sales over the past 24 months to c. £725m at consistently strong valuations |
The portfolio comprises 50% of HICL’s investments in Southmead Hospital and Pinderfields and Pontefract Hospitals and the entire equity interest in four UK LIFT[1] projects and Edinburgh Schools. The c. £225m consideration includes cash distributions received by HICL since 1 April 2025 and is in line with the Company’s last audited valuation of the assets as at 31 March 2025. The majority of the consideration will be received on completion, with a small non-contingent deferred element of £14m due by 30 June 2026 with the potential to bring this forward.
This transaction is the latest example of HICL’s strong track record of realisations, with approximately £725m of asset sales completed over the past 24 months at consistently strong valuations. The disposal further evidences the robustness of the Company’s NAV, is accretive to several key portfolio metrics, and further enhances portfolio construction. Following completion of the transaction, HICL’s exposure to healthcare assets will reduce from 22% to 16% of gross portfolio value.
The two largest assets in the portfolio sale are the Southmead Hospital and the Pinderfields and Pontefract Hospitals, where HICL will retain 31.25% and 50% shareholdings respectively. Both are large UK healthcare assets where the Investment Manager has worked extensively with the local NHS Trusts over a number of years to progress major capital works programmes to improve facility condition. At Southmead Hospital, InfraRed has significantly de-risked the project following the liquidation of Carillion in 2018.
Completion of the portfolio sale is expected before 31 December 2025 and is subject to customary third-party consents. Proceeds from the transaction will be used to fund the Company’s share buyback programme, including full repayment of the revolving credit facility, and to meet existing investment commitments of c. £110m.
Following completion of the disposal, InfraRed will manage the assets on behalf of APG under a separately managed account agreement. In light of this, and notwithstanding the fact that the transaction does not formally constitute a related party transaction under the UK Listing Rules, the Board, in line with good corporate governance practices, considers that the terms of the transaction are fair and reasonable as far as the Company’s shareholders are concerned and the Directors have been so advised by Investec Bank plc. An independent non-executive Director of the Company joined the HICL Investment Committee for each meeting pertaining to the transaction, and the Board reviewed the terms of the disposal prior to approving it.
As part of this transaction, HICL has agreed a partnership framework with APG which provides the opportunity to pursue further divestments over time, subject to the Company’s requirements. The framework also includes the option for co-investment into new assets, should attractive opportunities arise.
Mike Bane, HICL Infrastructure Plc Chair, said:
“We are pleased to announce another material disposal for the Company, which again highlights both the quality of HICL’s underlying portfolio and a consistent ability to execute divestments at attractive valuations. In the last two years, the Company has raised over £725m through disposals, enabling the Board to deliver on its capital allocation priorities for the benefit of shareholders.”
Edward Hunt, Head of Core Income Funds at InfraRed, said:
“This is another important transaction delivered by InfraRed in support of the Board’s objectives. The sale improves key portfolio metrics for HICL and reflects InfraRed’s ability to execute highly targeted divestments. It also reinforces the through-cycle attractiveness of high-quality infrastructure assets, with pricing that underscores the Company’s robust NAV and highlights the continued dislocation between public and private markets.”
[1] NHS Local Improvement Finance Trust
