Deals

3i Infrastructure offloads UK projects portfolio

The London-listed group says the projects are ‘less attractive’ as they have moved from the construction to the the operational phase.

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London-listed fund 3i Infrastructure has sold its entire UK-based projects portfolio in a deal worth £194 million ($255.5 million; €230.8 million).

The sale of the 16 PFI projects to buyers including Dalmore Capital, Semperian PPP Investment Partners and Innisfree followed 3i Infrastructure’s decision to initiate a strategic review of all projects in its portfolio after construction had been completed.

Assets offloaded in the sale include the Mersey Gateway Bridge in the north-west of England; the West of Duddon Sands transmission owner project off the coast of Cumbria in northern England; and Octagon Hospital. The latter operates the Norfolk and Norwich University Hospitals NHS Foundation Trust in the east of England, which the UK’s Care Quality Commission placed into special measures in June 2018 after it found the trust’s leadership to have been inadequate.

3i Infrastructure added in its statement that it would also be exploring the sale of its European projects portfolio. This represents 11 percent of the firm’s entire portfolio, with the remainder comprising economic infrastructure.

A spokeswoman for 3i Infrastructure told Infrastructure Investor: “All of these projects have moved from the construction to the operational phase, so the returns on them will be lower going forward. They are therefore less attractive to us, so we have decided to sell these projects.

“The strategic review also covered the European assets in the projects portfolio. However, we will still consider investing in new greenfield opportunities in future, across the UK and Continental Europe, but there aren’t currently many around.”

The sale comes at a pivotal time for UK infrastructure, with the opposition Labour Party today stating it would nationalise water and energy companies during its first 100 days in office should it win power at this Thursday’s general election. It has also previously pledged to nationalise all PFI contracts. During the current election campaign the party has promised citizens free fibre broadband – a policy that would require nationalising broadband providers, not just digital network operator Openreach, which the party has already promised to do.

3i Infrastructure has two UK-based assets in its economic infrastructure portfolio: landfill gas generator Infinis Energy and telecoms tower operator Wireless Infrastructure Group.