Investor confirms £37m deal to sell its interests in schools building programme

Investment company HICL is disposing of its entire equity interests in the Bradford Building Schools for the Future (BSF) phase one (Bradford 1) and Bradford BSF phase two Private Finance Initiative projects (Bradford 2) for £37m.

Completion is expected in quarter four 2023, subject to customary closing conditions.

Building Schools for the Future (BSF) was the Government’s investment programme in secondary school buildings in England in the 2000s. Around half of the work was procured under the Private Finance Initiative. (PFI)

HICL, which is managed by InfraRed Capital Partners Ltd, says it initially invested in Bradford 1 in June 2014, and in Bradford 2 in June 2009, acquiring additional stakes in the projects in 2021.

The business says its ownership has “enhanced community outcomes while creating value for shareholders.”

InfraRed actively managed Bradford 2 through its construction phase and supported the refinancing of the project in April 2023.

Proceeds from the transaction will reduce the drawn balance on the company’s Revolving Credit Facility. (RCF) Following completion of the disposal, drawings on the RCF are expected to be about £330m.

Edward Hunt, head of core income funds at InfraRed, said: “Selective divestments enhance portfolio composition, provide a valuable source of funding beyond capital markets, and reinforce the value of HICL’s high quality portfolio.

“This transaction builds on HICL’s long track record of delivering value enhancement through active asset recycling, and we continue to progress disposal opportunities where these deliver shareholder value.”