HICL Infrastructure Announces Portfolio Sale for £225m to Fund Share Buyback

On Monday, HICL Infrastructure (LON:HICL) announced the sale of a portfolio of seven UK Public-Private Partnership (PPP) assets to APG, the largest Dutch pension services provider, for approximately £225 million.

This strategic move aligns with HICL's valuation as of March 31, 2025, and will primarily fund the company’s previously announced £150 million share buyback program and outstanding equity commitments.

The portfolio includes 50% of HICL's investments in Southmead Hospital and Pinderfields and Pontefract Hospitals, as well as its entire equity stake in four UK LIFT projects and Edinburgh Schools.

The consideration of £225 million incorporates cash distributions received by HICL since April 1, 2025, and matches the company's last audited valuation of these assets.

A significant portion of the payment will be received upon completion, with a deferred element of £14 million due by June 30, 2026, potentially payable earlier.

The transaction brings HICL’s total asset sales over the past 24 months to approximately £725 million, achieved at consistently strong valuations. The company intends to use the proceeds to enhance shareholder value through share buybacks and strategic investments.

The board said it is considering deploying excess proceeds in line with its disciplined capital allocation framework, potentially including selective acquisitions alongside further share buybacks.

HICL's balance sheet and liquidity position will allow it to capitalize on attractive investment opportunities that align with its strategy.

HICL's operational performance remains strong, with portfolio cash generation in line with expectations. This supports the company's confidence in meeting its dividend guidance for the financial years ending March 31, 2026, and 2027.

According to Mike Bane, Chair of HICL, the board is pleased with the operational performance and the targeted disposal of the seven assets. He noted that portfolio cash generation remains in line with expectations, supporting confidence in meeting dividend guidance for the financial years to March 31, 2026, and 2027.

The UK Government's recent Comprehensive Spending Review and 10-Year Infrastructure Strategy may present investment opportunities for HICL, which will be evaluated based on their merits and the company's capital allocation framework.

HICL intends to engage with the UK Government as it consults with various stakeholders.

HICL believes it is well-positioned to advance its strategy, supported by increasing free cash generation, stable investment performance, and a portfolio resilient to macroeconomic volatility.