LONDON, Feb 26 (Reuters) - HICL, one of Britain’s biggest listed infrastructure investment funds, is looking to raise up to 167 million pounds ($252 million) to pay off debt and free up resources for new projects.
HICL, which invests in public infrastructure and concessions such as hospitals, roads and schools, said on Tuesday it will issue 100 million new shares at 119.5 pence, a 5.7 percent discount to Monday’s close.
Of those, 65 million will be offered to investors at a rate of one new share for every 15 share held. The offer will be raised to 140 million new shares if there is demand, said HICL, which announced on Jan. 31 it would look to raise funds.
HICL has a portfolio of 79 investments worth 1.17 billion pounds in sectors such as education, health, law enforcement, transport, and utilities, mainly in Britain, Canada, Ireland, and the Netherlands.
Tony Roper, team head of secondary infrastructure at InfraRed Capital which acts as investment adviser to the fund, told Reuters the new investments HICL was eyeing were mainly in Britain and in “social and transportational” sectors.
“The pipeline of new investment opportunities we are seeing is very healthy and some of those are at quite advanced stages.”
Infrastructure has become popular with institutional and individual investors because it can provide steady income streams from sources such as road tolls and inflation-indexed contract revenues.
Investing in infrastructure is also increasingly encouraged by governments seeking to boost private sector financing as they struggle to cut spending and limit public debt.
Approximately half HICL shares are in the hands of retail investors, Roper said, adding he expected to see two or more new institutional investors buying in during the capital raising.
HICL shares were down 1.0 percent at 125.5 pence in late trading, in line with levels prior to the Jan. 31 announcement.