LONDON (ShareCast) - (Sharecast News) - Listed infrastructure investment firm HICL Infrastructure Company has entered into an agreement to sell its 9.7% interest in the AquaSure Desalination PPP Project, it announced on Wednesday.
The FTSE 250 company said the value of its investment in AquaSure was increased by about 10% in September last year, in line with a market transaction earlier in 2017.

It said the disposal price agreed would generate a premium for the group of approximately 7% over the AUD 150m valuation of the investment as at 31 March.

The transaction was expected to complete during the fourth quarter of 2018, subject to third-party consents.

HICL said the disposal was initiated by its adviser InfraRed Capital Partners as part of the group's ongoing strategy of portfolio optimisation; delivering incremental value to shareholders through strategic disposals, where pricing was deemed attractive.

The forecast future returns from AquaSure were said to have been "appreciably lower" than the overall weighted average total return from the HICL portfolio, and the disposal was therefore expected to be accretive in terms of the total return.

It would also improve the correlation of portfolio returns to inflation; and increase the weighted average asset life of the group's portfolio.

HICL said it intended to use the proceeds to reduce the balance on its revolving credit facility.

Following completion of the disposal, drawings on the facility were expected to be in the region of £70m.

"The accretive sale of HICL's investment in AquaSure at this time, for an attractive price that takes advantage of favourable market conditions, is right for the company and its shareholders," said InfraRed director Harry Seekings.

"The company is committed to the Australian market and continues to seek opportunities for primary investments in Australia that are accretive to the HICL portfolio.

"This disposal exemplifies HICL's strategy of portfolio optimisation; and the achievement of a 7% premium over the most recent valuation clearly demonstrates the emphasis placed by the board and InfraRed on enhancing shareholder value over the long term."

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