Engineering and services group Bilfinger is giving up on public-private partnerships (PPPs) in favor of reemphasising its core business of industrial services, amid a companywide shift out of construction.
Bilfinger cited “the declining strategic role” of Bilfinger Project Investments (Bilfinger PI), labeled “the public-private partnership division of Bilfinger”. The company noted financial advisory Rothschild Group has been instructed to “divest” Bilfinger PI.
Publicly traded Bilfinger rose 4 percent to €81 per share on the Frankfurt Stock Exchange after announcing Monday that Bilfinger PI was up for sale. Bilfinger PI earned €41 million in 2012, compared to the €486 million Bilfinger netted.
Dedicated to social and transportation infrastructure, Bilfinger PI has a market presence in Australia, Europe as well as North America. It currently holds a portfolio of 16 PPP projects in which it has invested €254 million of equity.
Damien Joy, chief executive of Bilfinger PI North America, in Toronto, did not respond to a request for comment from Infrastructure Investor.
In the US, Bilfinger PI, in a consortium with VINCI Concessions and Wash Investors, secured in March a financial close on the ‘East End Crossing,’ a P3 and one-half of a $2.6 billion ‘mega project’ called the ‘Ohio River Bridges Project’.
A press official in Mannheim, Germany, said Bilfinger would like to sell Bilfinger PI “as a whole,” but stressed the company is “early in the process. “It will not be completed tomorrow, or in a week,” he added.
In parting with its “concessions business” and abandoning construction, the company will retrench, concentrating on civil engineering as well as building maintenance and services.
Bilfinger is the latest infrastructure developer in 2013 to shake up its business model. German outfit Hochtief recently sold its airport business to PSP Investments for $1.4 billion, while Canada's SNC-Lavalin Group has decided to sell-off its PPP portfolio.