HICL ups stake in French toll motorway

HICL Infrastructure announced the increase of its stake in the A63 Motorway concession in France on Thursday, by acquiring an additional 3.1% interest for £20m.

This FTSE 250 company said the move would bring its total interest in the toll road to 24%, with the purchase expected to be completed early next year, pending consents.

It said the A63 Motorway concession was a 40-year commitment to design, upgrade, finance, operate, and maintain a 104-kilometre section of the A63 highway between Salles and Saint-Geours-de-Maremne in southwest France.

The asset's strategic location along a crucial trans-European transport corridor helped to ensure resilient traffic performance.

HICL initially invested in the A63 in 2017, with InfraRed managing the asset since 2011.

The acquisition would be funded using the proceeds from recently announced disposals, and it is projected that HICL's revolving credit facility will be £135m drawn once the disposals were finalised.

“This attractive incremental investment for HICL aligns with the board's strict capital allocation framework,” said chair Mike Bane.

“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 revolving credit facility drawings over time.”

At 0919 GMT, shares in HICL Infrastructure were up 0.73% at 138p.

Reporting by Josh White for Sharecast.com.