HICL Infrastructure Company Limited (HICL), the listed infrastructure investment company advised by InfraRed Capital Partners, has acquired an incremental investment in the Sheffield Schools PFI Project in conjunction with its existing joint venture partner, Kajima Partnerships Limited (KPL), from the Kier Group Pension Scheme for a consideration of £4.1 million.
The HICL Group and KPL have an existing joint venture holding company, in which the HICL Group has a 75 per cent shareholding. Previously Holdco owned a 50 per cent interest in the Project. Following the transaction, HoldCo now owns 100 per cent of the Project, thereby increasing the HICL Group’s indirect ownership from 37.5 per cent to 75 per cent.
The Project is a 26-year PFI concession which involves the design, construction, financing, maintenance and operation of two new primary and two new secondary schools on behalf of Sheffield City Council. The Project was signed in April 2005 and has been fully operational since January 2007. The provision of soft and hard facilities management services during the operational phase of the Project continues to be undertaken by Kier Facilities Services under a concession life contract.
The consideration paid by the HICL Group for the incremental investment is in line with the current valuation of similar UK social infrastructure projects in the HICL Group’s portfolio and was funded from existing cash resources. Following the acquisition, the HICL Group has a net funding requirement of approximately £7 million.