UK-listed construction firm Carillion is generating “substantial value” from secondary sales of equity stakes in public-private partnerships (PPP) and may be looking to offload more of them in the near future.
The firm said in a half-year trading update that it has sold off two PPP equity stakes in June, the Exeter Schools project in Exeter and the Renfrewshire Schools project in Scotland, which generated proceeds of £13.8 million (€16 million; $22 million). Including Exeter and Renfrewshire, Carillion has sold investments in a total of 25 projects, generating proceeds of approximately £194 million and a pre-tax profit of about £107 million, according to the update.
Carillion may continue to offload such stakes in the near future. A report in the UK’s Independent newspaper said that the firm is seeking to raise up to £100 million from further equity stakes in a range of PPP investments. Potential buyers for the stakes include the Dutch Infrastructure Fund and Innisfree, the Independent said.
A UK spokesperson for Carillion said it is part of the group’s longstanding policy to sell selected mature PPP assets in its portfolio in the secondary market “as and when”. She refused to comment on the Independent story.
Carillion also continues to pursue new PPP opportunities. It achieved financial close on three such projects in the first half of the year. These include the Tameside Building Schools for the Future programme, the Lister Hospital in Hertfordshire and the Royal Victoria Hospital in Ontario, Canada – in which Carillion expects to invest a total of £11.2 million of equity.
Seven more projects are being pursued in the UK and Canada, for which Carillion has already been shortlisted as a bidder and may invest up to £50 million, the firm said in the statement.
Philip Borel contributed reporting to this article.