HICL Infrastructure acquires 50% interest in the Southmead Hospital PFI Project

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HICL Infrastructure acquires 50% interest in the Southmead Hospital PFI Project

HICL Infrastructure Company Limited, an investment company advised by InfraRed Capital Partners Limitedhas acquired a 50% interest in the Southmead Hospital PFI project in Bristol (UK) from Carillion plc.  

HICL Infrastructure will pay a consideration of £87.8 million (US$136.1 million) to Carillion. The consideration includes a future loan note subscription obligation of £48.7 million (US$75.5 million), which will be paid by the group in September 2015.

The project is a £430 million (US$666.8 million), 35 year concession to design, build, finance, operate and maintain an 800-bed acute hospital on a single site at Southmead in North Bristol, on behalf of the North Bristol NHS Trust.

Construction is being undertaken by Carillion Construction Limited in two distinct phases. The first phase, comprising the construction of a 102,000 m² new acute hospital "Brunel" building, was completed in March 2014, with the hospital now open for use and fully operational since May 2014.  The second phase, which includes the demolition of the old hospital site, is due for completion in 2016.

The provision of hard facilities management services during the operational phase of the project is subcontracted to Carillion Services Limited under a concession life contract.

The acquisition, which was funded by way of drawings under the group's revolving credit facility (RCF), is in line with the current valuation of similar UK infrastructure projects in the Group's portfolio.  As a result of recent investment activity funded by the RCF, and net of proceeds from a recent disposal of the Fife Schools project, the Group has a current funding requirement of approximately £47 million.

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

"We are delighted to further our long-standing relationship with Carillion with this acquisition, and we look forward to working with all stakeholders in the project to provide the building and associated services to the required contractual standards."

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