Fundraising

HICL puts £88m into hospital PFI

A larger than average deal for the UK listed fund sees it acquire a 50 percent stake in the Southmead project from developer Carillion.

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HICL Infrastructure Company (HICL), the UK listed fund advised by InfraRed Capital Partners, has announced the acquisition of a 50 percent stake in the Southmead Hospital Private Finance Initiative (PFI) project.

The interest has been acquired from UK developer Carillion for £87.8 million (€124.0 million; $136.0 million), including a future loan note subscription obligation of £48.7 million which HICL said in a statement would be paid in September this year.

The Southmead project, worth £430 million overall, is a 35-year concession to design, build, finance, operate and maintain (DBFOM) an 800-bed acute hospital at Southmead in North Bristol, in the west of England, on behalf of North Bristol NHS Trust.

Construction is being undertaken by Carillion Construction in two phases. The first phase, comprising a new 102,000-square metre acute hospital (the “Brunel” building) was completed in March last year. It has been open for use and fully operational since May 2014.

The second phase, which includes the demolition of the old hospital site, is due for completion next year. The provision of hard facilities management services during the operational phase has been subcontracted to Carillion Services Limited under a concession life contract.

HICL said the acquisition was funded by drawing from its revolving credit facility (RCF). It added that, as a result of recent investment activity funded by the RCF – taking into account proceeds from the recent Fife Schools project disposal – the group now has a funding requirement of approximately £47 million.

The Southmead investment is considerably larger than those normally made by HICL. Recent deals have included Salford & Wigan Building Schools for the Future Phase I and II incremental stakes for a combined £16 million, and a 75 percent stake in the Zaanstad Penitentiary prison project in the Netherlands for €11.5 million.

InfraRed Capital Partners yesterday appointed Stewart Orrell as its new asset management head from UK developer Balfour Beatty, replacing 26-year InfraRed veteran Gareth Craig.

Among InfraRed’s stable of nine funds, HICL is one of two funds listed on the London Stock Exchange – the other being The Renewables Infrastructure Group (TRIG).