Performance steady, pipeline growing at INPP

The listed UK infrastructure investor’s latest interim management statement shows its portfolio performing ‘in line’ with expectations. The statement also flags a strong pipeline of opportunities, a small capital raising and a renewal of the firm’s corporate debt facility.

International Public Partnerships Limited (INPP), the UK-listed investor in public-private partnerships (PPPs), said that its portfolio of assets “continues to perform line with expectations” in an interim management statement covering the period 1 January to 12 May 2011.

The statement said that revenues and cash receipts continued to be “in line with management forecasts”. Since the end of last year, risk free rates had “risen slightly in many of the countries where INPP has assets and this can be expected to have a small negative effect on net asset valuation”.

It also said that the effect of foreign exchange movements on the portfolio had been “small and mixed” with sterling weakening against the Australian dollar and Euro, while strengthening against the Canadian dollar.

INPP said it had a “significant pipeline of opportunities” at an advanced stage of development. These included three UK offshore transmission projects being developed by INPP’s investment advisor Amber Fund Management alongside consortium partner Transmission Capital Partners.  These projects are expected to reach financial close in the second half of this year, after which INPP will hold 100 percent of the equity.

During the January to May period, INPP made £23 million (€26 million; $37 million) of new investments. These comprised: £12.4 million in a project connecting transmission cable to an offshore wind farm at Robin Rigg, just off the Cumbrian coast in northwest England; £6.2 million for an 80.1 percent stake in the acquisition of Liverpool Central Library; and £4.4 million in eight NHS LIFT (Local Improvement Finance Trust) projects in the UK including South Bristol Community Hospital.

Also during the period, the firm was part of a consortium named preferred bidder for the Gold Coast Rapid Transport Project in Queensland, Australia. The project comprises the provision of 13km of above-ground light rail and the provision and operation of 14 rail vehicles. Financial details of the project will be revealed at financial close, which is expected next month.

In January, the firm used its tap facility to raise an additional £2.3 million through the issue of 2 million new shares at an average price of 117 pence. The proceeds were fully allocated to existing opportunities where INPP/Amber had exclusivity. As at 12 May, the firm had a total of £40 million cash available on its balance sheet to finance new opportunities and pay distributions to investors.

On 20 April, the firm renewed its existing £100 million corporate debt facility with the Royal Bank of Scotland and National Australia Bank “on similar terms” to the existing facility. The facility is designed to allow the firm to make additional acquisitions where it does not otherwise have sufficient cash available – in the expectation that drawings under the facility will be refinanced through subsequent equity capital raisings. The renewed facility, currently undrawn, expires in May 2014.

At 12 May, INPP’s portfolio comprised 60 projects: 45 in the UK, 7 in Australia; 2 each in Canada and Germany; and 1 each in Belgium, Ireland, France and Italy.