HICL Expands Interest in French A63 Motorway with Strategic Acquisition

27 January 2025

HICL Expands Interest in French A63 Motorway with Strategic Acquisition

 

HICL is pleased to announce the acquisition of an additional 3.1% interest in the A63 Motorway concession in France for approximately £20 million, bringing HICL’s total stake to 24%. This strategic investment was secured on highly accretive terms and underscores HICL’s commitment to disciplined capital management.

The A63 Motorway is a 40-year toll-road concession encompassing the design, upgrade, financing, operation, and maintenance of a critical 104-kilometer stretch between Salles and Saint-Geours-de-Maremne in southwest France. As a pivotal trans-European transport corridor, the A63 has consistently demonstrated strong traffic resilience. HICL first invested in this asset in 2017, with InfraRed providing management expertise since 2011.

This acquisition aligns with HICL’s rigorous capital allocation strategy, offering returns and yields that surpass other potential uses of capital, including share repurchases. The Board carefully evaluated this opportunity against alternative investments and concluded that it represents a compelling chance to enhance value within HICL’s portfolio by deepening involvement in a high-performing asset.

Funding for this acquisition will be sourced from proceeds of recently announced disposals. Upon completion of these disposals, HICL’s revolving credit facility (RCF) is projected to be approximately £135 million drawn. This transaction highlights HICL’s proactive approach to optimizing portfolio composition through strategic asset rotation.

Mike Bane, Chair of HICL, commented:

“This attractive incremental investment for HICL aligns with the Board’s strict capital allocation framework. It provides greater accretion than alternative uses of capital and the investment has a well-understood risk profile. Highly disciplined balance sheet management remains a priority for the Board, including the reduction of RCF drawings over time.”

Edward Hunt, Head of Core Income Funds at InfraRed, added:

“We are pleased to have increased HICL’s stake in this high-quality European transport link, which InfraRed has successfully managed for over ten years. While the bar for acquisitions remains high, incremental investments such as this demonstrate the attractive risk and reward dynamic that can be captured by nimble investors in the current market in specific circumstances.”