HICL Infrastructure Company Limited – Acquisition of new investment for £269m

4 April 2019 Investments

HICL Infrastructure Company Limited (“HICL” or the “Company”), the listed infrastructure investment company advised by InfraRed Capital Partners Limited, is pleased to announce that it has reached agreement to acquire a 36.6% equity interest in the various entities that comprise the Affinity Water Group (“Affinity Water”) (including the regulated entity, Affinity Water Limited).  HICL is part of a consortium, alongside DIF Infrastructure and Allianz Capital Partners on behalf of Allianz Group, which has agreed to acquire 100% of the equity interest in Affinity Water Acquisitions (Investments) Limited (“Topco”) from Morgan Stanley Infrastructure and Infracapital. The investment is consistent with HICL’s strategy of investing in assets that are positioned at the lower end of the risk spectrum in three target market segments: PPPs; regulated assets; and demand-based assets.

Affinity Water is the largest water-only company in England and Wales by revenue and population served, with a regulatory capital value of £1.156 billion as at 31 March 2017[1]. It is licenced under the Water Industry Act 1991 and regulated by Ofwat, and its principal activities are water supply and distribution and the construction and maintenance of water supply infrastructure. Affinity Water serves 1.5 million customers across an area of approximately 4,515 square km in the south east of England.

Tony Roper, Director at InfraRed Capital Partners Limited, said:

“InfraRed is delighted to have secured this £269m investment in Affinity Water, the largest water-only service company in England and Wales, for HICL.  The investment is in line with HICL’s stated acquisition strategy and supports the delivery of the Company’s investment proposition to produce long-term income for shareholders from a portfolio of infrastructure investments positioned at the lower end of the risk spectrum.

The investment in Affinity Water will be accretive to the existing HICL portfolio in terms of total return, weighted average asset life and inflation correlation. We look forward to working with the management team and supporting them to continue to deliver a high quality service for Affinity Water’s customers.”

[1] Source: Ofwat published Regulatory Capital Value at 31 March 2017 (March 2016 real prices) indexed in line with RPI between March 2016 and March 2017, as published by the Office for National Statistics

Please follow the link for the full RNS issued by HICL.

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