HSBC propels helicopter training project

HSBC Infrastructure, which already owns a 22% stake in the helicopter training facility in Oxford, is making a £2.1m loan toward the project, which was completed in August 2000 under the UK’s private finance initiative programme. The money will be used to upgrade a Chinook flight simulator.

HSBC Infrastructure Company Limited, banking group HSBC’s listed infrastructure investment company, recently invested £2.1 (€2.33 million; $3.4 million) million in a helicopter training facility project in which it already owns a 22 percent stake.

Completed in 2000, the Helicopter Training Facility in Oxford provides a flight simulation environment for helicopter pilots. It receives revenue based on usage by the Ministry of Defence and third parties, with guaranteed minimum amounts.

Helicopter flight
training: about to
get an upgrade

HSBC Infrastructure said its investment will be used to upgrade a Chinook simulator used for training by the Royal Netherlands Air Force, which uses the facility in addition to the UK’s Royal Air Force. The extra funds are being provided through £2.1 million in loan notes yielding 12.75 percent.

The project was delivered under the UK government’s private finance initiative programme, which seeks to involve the private sector in the provision of public infrastructure through a standardised procurement process.

The project reached financial close in October 1997 and involved capital expenditures of about £100 million. It is a 40-year design, build, finance, maintain and operate contract with a break option exercisable by the procuring authority after 20 years.

In related news, HSBC Infrastructure recently raised £80 million through a public share offering that was “substantially oversubscribed”, according to a statement. The company received applications for 122 million shares at £1 per share, according to the statement.

Proceeds from the share issue will be used to pay down existing debt and to fund future acquisitions.