TIDMINPP
RNS Number : 1851B
International Public Partnership Ld
31 March 2017
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT
FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH
AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR
TO U.S. PERSONS. THE INFORMATION CONTAINED HEREIN DOES NOT
CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION.
31 March 2017
financial cloSe on THE ACQUISITION OF A 61% INTEREST IN national
grid GAS distRibution network
International Public Partnerships Limited, the listed
infrastructure investment company (the 'Company', 'INPP'), is
pleased to announce that it has, as part of the Quad Gas Group
consortium, reached financial close on the acquisition of a 61%
interest in National Grid's gas distribution networks ('GDNs', the
'networks' or the "investment"). The Consortium has also
established the right to acquire an additional 14% equity interest
in the GDNs from National Grid in due course.
The Company has invested GBP274 million for a 4.4% interest in
the four regulated networks, with the remaining risk capital funded
by consortium partners who include other leading UK and
international institutional investors (together, the
"Consortium").
The four networks each cover a geographic monopoly in,
respectively, the East and North West of England, North London, and
the West Midlands. The networks distribute gas to approximately 50%
of the country's connected households through 130,000km of gas
pipeline. The GDNs are well-established, predictable, and strong
cash yielding businesses whose characteristics are consistent with
and complementary to the other regulated and non-regulated assets
in the Company's portfolio.
Key attributes of the investment for the Company include:
-- Highly predictable long term low volatility cash flows;
-- A stable regulatory environment;
-- Very long life assets;
-- Strong levels of inflation linkage; and
-- Projected returns that are expected to be accretive to the Company's portfolio.
The investment illustrates the continued ability of the Company
to source attractively valued core infrastructure assets and, in
particular, through its investment adviser, Amber Infrastructure,
to have material influence on the structuring, analysis and
execution of large infrastructure transactions.
Rupert Dorey, Chairman of International Public Partnerships,
said: "The acquisition of essential UK infrastructure assets such
as these gas networks further underlines our ability to find high
quality, low volatility infrastructure transactions in the current
market at prices that continue to add value for shareholders. This
transaction will also enhance the portfolio's inflation protection
and cash generation."
The GDNs operate under a stable regulatory framework which
allows a permitted return to be made by investors on the regulated
asset base of the GDNs. This regime is overseen by Ofgem and
benefit from RPI-linked revenues. Future cash flow generation is
therefore predictable with regulatory mechanisms in place to reduce
risk with respect to unpredictable costs. The effect of the
acquisition of the interest in the GDNs also is to extend the
Company's weighted average investment life to 34 years from 31
years (at 31 December 2016). It will also have the effect of
improving the inflation linkage within the portfolio, which will
rise to 0.89% for every 1% increase in inflation rates assumed in
the portfolio valuation (previously 0.78% at 31 December 2016).
National Grid will continue to own a 39% interest in the
networks and the existing management team will remain in place
providing operational and management continuity.
Additional to the 61% interest acquired by the Consortium, a
further 14% interest in the networks has also been negotiated with
National Grid and is subject to put and call options between
National Grid and the Consortium. Furthermore, the Consortium has
pre-emption arrangements over the residual 25% investment that
National Grid would continue to hold after exercise of these
options.
The Company's investment in the GDNs strengthens its focus on
investments in regulated assets which deliver long-term,
sustainable, inflation-linked revenues. This began in 2011 in the
offshore transmission (OFTO) sector and continued with the
Company's investment into the Tideway project in 2015. The Company
sees these assets as fully complementary to the other assets in its
portfolio in terms of length and predictability of cash flow and
inflation protection.
The Company will fund its acquisition through its corporate debt
facility. This facility is now either drawn or committed to
identified opportunities to a level of cGBP360 million out of a
total available capacity of GBP400 million.
Following the Company's Annual Results on 30 March 2017, the
Board has indicated that it expects to raise additional capital in
early Q2 2017 in the order of GBP250 million. Further details,
including a prospectus, are expected to be to be announced in the
near future.
S.
For further information:
Erica Sibree
Amber Fund Management
Limited +44 (0)20 7939 0558
Nick Westlake/Hugh Jonathan
Numis Securities +44 (0)20 7260 1345/1263
Ed Berry/Mitch Barltrop
FTI Consulting +44 (0)20 3727 1046/1039
Important Information
This announcement contains information that is inside
information for the purposes of the Market Abuse Regulation (EU)
No. 596/2014.
This announcement is an advertisement. It does not constitute a
prospectus relating to the Company and does not constitute, or form
part of, any offer or invitation to sell or issue, or any
solicitation of any offer to purchase or subscribe for, any shares
in the Company in any jurisdiction nor shall it, or any part of it,
or the fact of its distribution, form the basis of, or be relied on
in connection with or act as any inducement to enter into, any
contract therefor.
Forward-looking statements are subject to risks and
uncertainties and accordingly the Company's actual future financial
results and operational performance may differ materially from the
results and performance expressed in, or implied by, the
statements. These forward-looking statements speak only as at the
date of this announcement. The Company, Amber and Numis Securities
expressly disclaim any obligation or undertaking to update or
revise any forward-looking statements contained herein to reflect
actual results or any change in the assumptions, conditions or
circumstances on which any such statements are based unless
required to do so by the Financial Services and Markets Act 2000,
the Prospectus Rules of the Financial Conduct Authority or other
applicable laws, regulations or rules.
Notes to Editors:
About Quad Gas Group
The consortium is made up of Allianz Capital Partners, Amber
Infrastructure, CIC Capital Corporation (CIC), Dalmore Capital,
Hermes Investment Management, Macquarie Infrastructure and Real
Assets (MIRA), and Qatar Investment Authority.
Following acquisition, the business will have the following
ownership structure:
* National Grid 39.0%
* Quad Gas Group
o MIRA 14.5%
o CIC Capital 10.5%
o ACP 10.2%
o Hermes 8.5%
o QIA 8.5%
o Amber/INPP 4.4%
o Dalmore Capital 4.4%
Total 100.0%
The Consortium consists of long term investors in the UK's
critical infrastructure with a track record of delivering reliable
services and operational outperformance in regulated industries -
they have proven operational excellence, as well as financial
scale.
Individually they have invested in a multitude of global
projects in the regulated asset environment, including numerous gas
assets such as Open Grid Europe, Gassled and NET4GAS, Czech Gas
Networks, Thyssengas, Wales & West Utilities, and have a
successful track record of investing in the UK's largest critical
infrastructure investments, including Tideway Tunnel, Heathrow,
Thames Water and Porterbrook.
About the Gas Distribution Networks:
National Grid has agreed a sale of a 61% shareholding in its gas
distribution network which consists of four of the eight UK
regional GDN companies which deliver gas from the high pressure
transmission network (also owned by National Grid) across the East
of England, North London, the North West and the West Midlands. The
four GDNs, the subject of this transaction, distribute gas to
approximately half of the country's connected households serving 11
million customers across a network of 131,000km of gas pipeline.
These GDNs are regulated by Ofgem, the UK's gas and electricity
regulator.
About International Public Partnerships:
International Public Partnerships ('INPP') is a listed
infrastructure investment company which invests in global public
infrastructure projects developed under the public private
partnerships ('PPP'), private finance initiative ('PFI'), regulated
asset and other similar procurement methods.
Listed in 2006, INPP is a long-term investor in 127 social and
transport infrastructure projects, including schools, hospitals,
courts, police headquarters, transport and utility and transmission
projects in the UK, Europe, Australia and North America. INPP seeks
to provide its shareholders with both a long-term yield and capital
growth through investment across both construction and operational
phases typically of 25-40 year concessions.
Amber Infrastructure Group ('Amber') is the Investment Advisor
to INPP and has around 90 dedicated staff who manage, advise on and
originate projects for INPP.
Visit the INPP website at
www.internationalpublicpartnerships.com for more information.
About Amber Infrastructure Group:
Amber is a leading international infrastructure specialist,
providing asset management and investment advisory services in
respect of over GBP7 billion of assets in the UK, Europe, Australia
and North America. Amber's core business focuses on sourcing,
developing, advising on, investing in and managing infrastructure
assets within the utilities, PPP, transport, renewable energy and
regeneration sectors.
Amber provides investment advisory services to International
Public Partnerships
Limited as well as private investment funds, specialising in
urban regeneration. Amber is headquartered in London with offices
in Munich, Sydney, Melbourne and San Francisco and employs over 90
people, making it one of the largest international infrastructure
specialists.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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