Activity picks up in PFI secondary market

DIF has acquired 50% of Amey’s portfolio of 10 PFI projects while the Innisfree PFI Secondary Fund has scooped Kier’s 50% interest in two schools projects.

Fund manager DIF’s second infrastructure fund has acquired 50 percent of Amey’s portfolio of 10 project finance initiative (PFI) projects. Additionally, the Innisfree PFI Secondary Fund scooped construction group Kier’s 50 percent stake in two schools projects.

The acquisitions have given an end of year boost to the secondary market for projects that form part of the UK government’s PFI programme, a standardised procurement process involving the private sector. While service provider Amey and DIF would not disclose the transaction price, Kier said it sold its two stakes for £7.3 million (€8.2 million; $11.6 million), an 8 percent discount on the projects’ base case cash flows. Amey expects to net a profit of £4.2 million from the sale.

Amey’s portfolio includes a mixture of PFI projects in construction and operation, including roads, courts, defence, education and accommodation projects. Amey said its new partnership with DIF Infrastructure II will make no difference to the day-to-day management of the contracts. Despite the sale of its stakes in Waltham Forest Schools and Tendring Schools, Kier said it will continue to provide facilities services to the projects for the duration of their concession period.

Last week, DIF Infrastructure II acquired full control of four UK schools projects held in a joint-venture with Dutch developer BAM PPP. The fund paid BAM PPP €20 million for its 50 percent stake in the joint- venture.