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HICL Infrastructure to Acquire 35% Stake in UK High Speed 1 Project
Monday 17 July 2017

17 July 2017 - UK-based infrastructure investment company HICL Infrastructure Co Ltd. (LSE: HICL) has signed an agreement to acquire a 35% equity interest in the entities that comprise the UK-based High Speed 1 Project, the company said.
 
HICL is a member of a consortium, alongside funds managed by Equitix Investment Management Ltd. and third party funds managed by InfraRed, which has agreed to acquire 100% of HS1 from Borealis Infrastructure (on behalf of OMERS Administration Corp.) and Ontario Teachers' Pension Plan Board.

The members of the consortium will acquire interests in HS1 pro rata by reference to their respective shareholdings, with HICL and the Equitix funds each acquiring 35%, and the third party InfraRed funds acquiring the balance of 30 %
 
HS1 is a strategic asset in the UK and operates the country's only high-speed rail link, including four stations and associated infrastructure.

The rail link runs for approximately 109km between London St Pancras International station and the Channel Tunnel.

In 2016, it carried over 20m passengers, providing critical transport infrastructure for commuters in South East England and connecting London to several major European cities.

HS1's revenues are generated from domestic and international train journeys; unregulated activities, principally comprising retail leases at St Pancras International; and regulated activities such as maintenance and operations.

The acquisition is consistent with HICL's strategy of investing in assets that are positioned at the lower end of the risk spectrum.
 
HICL's share of the consideration amounts to up to GBP 320m (USD 418.94m).

Completion will occur following satisfaction of provisions in the HS1 concession agreement relating to a change of control of HS1.

Following completion, HICL intends to bring in minority co-investors managed by InfraRed representing up to GBP 120m of its commitment, subject to the terms of the concession agreement.

This is consistent with its strategy of partnering with aligned co-investors on larger transactions.
 
The investment will be funded using HICL's existing cash resources and drawings from its revolving credit facility.

Following completion of the acquisition, and on the basis that HICL has brought in co-investment of up to GBP 120m of its equity interest, HICL will have a net funding requirement of approximately GBP 140m.
 
HICL Infrastructure Co 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 116 infrastructure investments, HICL is seeking further suitable opportunities, which are positioned at the lower end of the risk spectrum, in three target markets segments: PPPs; regulated assets; and demand-based assets.
Details
Date Published: 17/07/2017
Target: High Speed 1 Project
Country: UK
Sector: Railways
Type: Stakebuilding
Financing: Cash
Status: Agreed
Vendor: Borealis Infrastructure, Ontario Teachers´ Pension Plan Board
Buyer: HICL Infrastructure Co
Comment:
HICL Infrastructure investing as part of consortium including funds managed by Equitix Investment Management Ltd. and third party funds managed by InfraRed, which is acquiring 100% of the project

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