SA Health Partnership – a consortium led by InfraRed Capital Partners – has reached financial close for Australia’s largest public-private partnership (PPP) in the healthcare sector: the new Royal Adelaide Hospital, located in the south of Australia.
“This is a large project with over A$100 million (€73 million; $106 million) of equity committed by us,” commented Sebastien Pochon, director of infrastructure at InfraRed. “It highlights InfraRed’s commitment to the Australian PPP market, as demonstrated by our earlier investment in the Victoria Desalination project,” he added.
The new hospital will cost A$1.85 billion to build and will offer a total of 800 beds once it opens in 2016. Following the five-year construction period, the private partner will also be responsible for operating the hospital over a 30-year concession.
A club of 15 banks provided A$2.5 billion for the project. They comprised: Australia and New Zealand Banking Group; Bank of Ireland; BBVA; BOS International; Credit Agricole CIB Australia; DBS Bank; HSBC; Industrial and Commercial Bank of China; ING; Intesa Sanpaolo; Investec; National Australia Bank; Societe Generale; Santander and WestLB.
The loan breaks down into two facilities: an almost five-year construction facility paying a 2.60 percent margin over the Bank Bill Swap Bid Rate (BBSY); and a two-year term loan that refinances the construction facility, paying 2.45 percent over BBSY. BBSY is a benchmark rate normally used by firms engaging in interest rate swaps or related transactions.
To view the complete debt profile for Royal Adelaide Hospital, please log on to Infrastructure Investor Assets, Infrastructure Investor’s companion database.
SA Health Partnership’s five equity sponsors – InfraRed Capital Partners (30.58 percent), John Laing Investment (17.26 percent), Uberior Infrastructure Investments (17.26 percent), Leighton Infrastructure Investments (19.9 percent) and Macquarie Capital Group (15 percent) – are providing A$300 million in equity for the deal.
That brings the transaction’s total debt-to-equity ratio to 88.5: 11.5.