HICL Infrastructure is acquiring a further 3.1% interest in the A63 Motorway concession in southwest France for £20m (€23.1m) from a co-shareholder.
The London-listed infrastructure investment company managed by InfraRed Capital Partners said following the latest investment, it will hold a 24% interest in the 40-year toll-road concession.
The toll-road concession involved designing, upgrading, financing, operating and maintaining a 104km section of the existing A63 between Salles and Saint-Geours-de-Maremne. According to HICL’s website, the project had a capital expenditure of €1.13bn.
HICL first invested in the A63 in 2017, and InfraRed’s management of the asset dates back to 2011. In 2016, AXA IM Alts took a 42% stake in the French motorway in a joint venture with Crédit Agricole Assurances. The stake in Atlandes, the concession-holder of the A63 motorway, was sold by InfraRed’s infrastructure Fund III.
At the time, the remaining 58% of Atlandes was held by a consortium of industrial partners and financial investors.
Mike Bane, chair of HICL, said: “This attractive incremental investment for HICL aligns with the board’s strict capital allocation framework.
”It provides greater accretion than alternative uses of capital and the investment has a well-understood risk profile. Highly disciplined balance sheet management remains a priority for the board, including the reduction of RCF [revolving credit facility] drawings over time.”
Edward Hunt, the head of core income funds at InfraRed, said: “We are pleased to have increased HICL’s stake in this high-quality European transport link, which InfraRed has successfully managed for over ten years.
”While the bar for acquisitions remains high, incremental investments such as this demonstrate the attractive risk and reward dynamic that can be captured by nimble investors in the current market in specific circumstances.”
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