Infratil formalises commitment to Australian PPP projects

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Infratil  formalises commitment to Australian PPP projects

Infratil announced on 25 October 2013 its intention to commit A$100 million to pursue greenfield availability based public-private partnership (PPP) opportunities in Australia via the Australia Social Infrastructure Partners (ASIP) platform.

The ASIP platform consists of two vehicles managed by H.R.L. Morrison & Co.; Leighton Contractors Infrastructure Partners and Public Infrastructure Partners Australia, established in 2012.

Infratil has announced that it has now formalized that commitment, entering into a conditional subscription deed under which it will subscribe for units in the two trust vehicles that make up ASIP. Following the subscription, Infratil will own 55% of the units in each vehicle. No additional management fees will be payable to H.R.L. Morrison & Co. as a result of the commitment.

ASIP has currently invested in 9.95%  and 49.9% respectively of the equity in the A$1.85 billion New Royal Adelaide Hospital PPP and the A$232 million South East Queensland Schools PPP. Approximately A$11.7 million will be paid by Infratil on subscription, reflecting Infratil's share of capital called for those two investments plus returns to date.  The balance of the A$100 million commitment is likely to be called over a 2-3 year period as bids for PPP opportunities are progressed.

Under the alliance arrangements between H.R.L. Morrison & Co and Leighton Contractors, Infratil and other institutional investors have the opportunity to participate as equity investors in future Leighton Contractors' PPP projects via the Leighton Contractors Infrastructure Partners vehicle. The terms of the strategic alliance allow for additional co-investment by Infratil in Leighton Contractors' PPP projects and also provides the flexibility to pursue greenfield projects where Leighton Contractors is not involved.

The subscription deed is conditional on obtaining certain change of control consents, which are expected to be obtained by the end of January 2014.

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