HICL Infrastructure Company Limited has invested €11.5 million (US$12.6 million) for a 75% interest in the Zaanstad Penitentiary Institution PPP project, acquired from a subsidiary of Ballast Nedam BV.
The project comprises the construction and 25-year operation of a new penitentiary institution in Zaanstad, the Netherlands. The project is governed by a design, build, finance, maintain and operate agreement with the State of the Netherlands and has tenure of 27.5 years.
The facility, which is currently being built, will have a capacity of approximately 1,000 detainees, and includes a labour centre, a psychiatric care institute, a recreational facility, offices and healthcare facilities. The complex is being built on a greenfield site of flat land in a polder area, right next to the North Sea canal. Construction commenced in April 2014 and the project is scheduled to be operational in March 2016.
The obligations relating to both the delivery of the construction works and of the facilities management services have been sub-contracted to a single sub-contractor formed by subsidiaries of the Ballast Nedam group group and the Royal Imtech group. Custodial services do not form part of the Project's scope of services.
The consideration of €11.5 million comprises an investment in shares and a loan stock subscription obligation payable following construction completion. The acquisition is in line with the valuation of similar construction infrastructure projects in the Group's portfolio and was funded by way of drawings under the Group's revolving credit facility.
The Group has also recently completed the acquisition of an additional 12% equity and loan note interest in the Newham BSF project from RM Plc for £1.6m. This takes the Group's total interest in this project to 80%.
"We are delighted to have completed these acquisitions, in particular the project from Ballast Nedam, which represents HICL's second investment in Holland. We are pleased with the Project's construction progress and we look forward to working with both Ballast Nedam and Royal Imtech with a view to delivering the Project on time, and to future opportunities that may arise in the region."