Bilfinger fund in $40m of Canadian acquisitions

BBGI has bought 50% of Kelowna Vernon Hospitals and 100% of North East Stoney Trail – both availability-based P3s.

The Bilfinger Berger Global Infrastructure Fund (BBGI), a London-listed vehicle, has already put part of its recently raised capital to good use, acquiring stakes in Canadian healthcare and transportation projects.

The fund bought a 50 percent equity and loan note interest in Kelowna Vernon Hospitals and 100 percent equity and loan note interest in North East Stoney Trail for a combined $40.1 million. The first project will require BBGI to operate and maintain a number of healthcare-related facilities in the cities of Kelowna and Vernon, in British Columbia, Canada. The latter will see the fund operate and maintain a 21-kilometre stretch of highway that is part of a larger ring road in Calgary, Alberta.

Both projects are availability-based, meaning they will not expose BBGI to any demand risk.

In July, BBGI tapped the London Stock Exchange for £85 million (€99 million; $129 million) as part of an originally intended fundraise of £70 million. At the time, the fund said it would primarily use the funds raised for the Canadian acquisitions, but revealed it was in discussions with German infrastructure firm Bilfinger about the potential acquisition of a further pipeline of assets worth upwards of £200 million, which could lead it to raise even more money soon.

At the end of May, German developer Bilfinger announced a plan to exit its concessions business and divest its portfolio of projects in Australia, North America and Europe.

The engineering and services group cited the “declining strategic role” of Bilfinger Berger Project Investments, “the public-private partnership division of Bilfinger”, as the reason for its decision and said it will re-focus on its core business and industrial services, amid a company-wide shift out of construction.

When BBGI listed on the London Stock Exchange in December last year, it was with the aim of buying up to 19 projects from Bilfinger, which owns 19.95 percent of the vehicle. Since then it has been busy adding assets to its portfolio, such as the £35.9 million Victoria Prisons PPP/PFI project in Australia in March this year.