19 August 2022
HICL Infrastructure PLC
“HICL” or the “Company” and, together with its subsidiaries, the “Group”, the London-listed infrastructure investment company managed by InfraRed Capital Partners Limited (“InfraRed” or the “Investment Manager”).
Acquisition Activity – UK PPP
The Board is pleased to announce that HICL has agreed to acquire a minority equity position in Cross London Trains (“XLT“) from funds managed by Equitix Investment Management.
XLT is a Public Private Partnership (“PPP“) that owns the recently delivered fleet of rolling stock operating on the Thameslink passenger rail route which covers the North-South London commuter rail corridor and serves both Luton and Gatwick airports. Following completion of the transaction, XLT will represent approximately 3%1 of HICL's portfolio by value and will be HICL's third investment in the rail sector, after High Speed 1 and the Dutch High Speed Rail Link.
The fleet has been initially leased under a 20-year availability contract with a revenue underpin from the Secretary of State for Transport. The fleet of 115 Siemens Desiro City Class 700 trains was fully delivered in 2018 and has a strong operational track record. Long term maintenance obligations are retained by the manufacturer, Siemens, under a direct contractual arrangement with the franchise operator, Govia Thameslink Railway (GTR), and therefore sit outside of the project company's delivery obligations.
Completion is expected in Q3 2022 following customary third-party consents. The investment is accretive to key portfolio metrics and will be funded by drawing upon HICL's £730 million corporate credit facility and existing cash resources.
Edward Hunt, Head of Core Income Funds at InfraRed said:
“Cross London Trains is one of the largest rolling stock fleets in the UK. Its electrified trains are modern and efficient, sustainably serving the needs of commuting and leisure travellers alike. This investment further contributes to the delivery of HICL's vision to connect communities through investments in core infrastructure, while delivering long-term income to shareholders.”
1 By value using Directors' Valuation of £3,311.0m as at 31 March 2022, less the proceeds of £107.5m from the sale of Queen Alexandra Hospital
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