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HICL Infrastructure PLC on Thursday said it would be purchasing an additional stake in a French toll road on ‘highly accretive terms’.
The London-based closed-ended investment company has agreed to pay £20.0 million for a 3.1% stake in the A63 motorway in Southwest France, bringing its total interest in the asset to 24%.
The road, managed by Infrared Capital Partners Ltd, benefits from ‘strategic positioning’ as a key trans-European transport corridor. The company said this has resulted in ‘historically resilient traffic performance’.
The company said: ‘This acquisition was carefully evaluated against alternative uses of capital, including the repurchase of the company’s shares.’
The acquisition will be funded by proceeds from HICL’s recently announced disposals. Once these are completed, HICL’s revolving credit facility is expected to be drawn around £135.0 million.
HICL Chair Mike Bane said: ‘This attractive incremental investment for HICL aligns with the board’s strict capital allocation framework. It provides greater accretion than alternative uses of capital and the investment has a well-understood risk profile. Highly disciplined balance sheet management remains a priority for the board, including the reduction of RCF drawings over time’.
HICL shares were up 0.4% at 137.50 pence each in London on Thursday morning.
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