HICL Infrastructure has confirmed the sale of its equity interests in the ‘Bradford Building Schools for the Future’ (BSF) projects, encompassing both the first and second phases. The sale, estimated at £37 million, represents an 8% premium over the company’s valuation as of 31 March.
The FTSE 250 firm highlighted that this strategic decision aligns with its continuous efforts to foster capital growth by actively recycling assets. This move is anticipated to enhance key portfolio metrics and refine the portfolio’s overall composition.
Historically, HICL initially invested in the Bradford 1 and Bradford 2 projects in June 2014 and June 2009, respectively. Following additional stakes acquired in 2021, the sale has yielded an annualised holding period return of 11.5% for Bradford 1 and 14.1% for Bradford 2. The company’s active management of these projects has resulted in significant community benefits, including the yearly addition of 50 special educational needs and disabilities places for the local community.
Furthermore, the proceeds from this sale will be directed towards reducing the outstanding amount on HICL’s revolving credit facility (RCF). Following the sale, the facility’s drawn balance is projected to be approximately £330 million. The sale’s finalisation is expected in the fourth quarter of 2023, subject to standard closing conditions.
Edward Hunt, head of core income funds at HICL’s investment manager InfraRed, commented on the transaction, emphasizing the value of HICL’s high-quality portfolio and the company’s commitment to enhancing shareholder value through active asset recycling.
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