HICL Infrastructure PLC (LSE:HICL) has agreed to sell its 24% interest in France’s A63 Motorway — the second-largest asset in its portfolio — to the project’s majority shareholder for approximately £311 million. The transaction represents a 21% premium to the asset’s most recent valuation.
The disposal follows a nine-year investment period during which InfraRed Capital Partners oversaw the development and de-risking of the concession, guiding the project from its initial greenfield phase through to operational ramp-up. HICL said the sale realises value generated over several market cycles and reflects its strategy of actively rotating capital within the portfolio.
Completion of the transaction is expected to increase HICL’s net asset value by around 2.2 pence per share. The company said the sale will also improve several portfolio characteristics, including expected returns, yield, inflation correlation and asset life, while reducing exposure to lifecycle costs and French political risk.
Over the past three years, HICL has completed more than £1 billion in asset disposals at an average premium of 11% to valuation. Following the A63 sale, the group will have increased liquidity alongside an undrawn credit facility, providing additional flexibility to meet existing commitments, pursue new investment opportunities with returns above its buyback threshold, and adjust share repurchases depending on the discount of its share price to NAV.
HICL’s outlook continues to be supported by strong financial quality, including a debt-free balance sheet and solid cash generation. However, weaker recent revenue and earnings momentum moderates the overall picture. Technical indicators remain broadly neutral, while a relatively high dividend yield supports valuation, though the shares do not appear significantly discounted on a price-to-earnings basis. Recent corporate initiatives, including share buybacks and a proposed merger with The Renewables Infrastructure Group, provide an additional positive element to the investment case.
More about HICL Infrastructure PLC
HICL Infrastructure PLC is a London-listed infrastructure investment company that focuses on long-term ownership of predominantly operational infrastructure assets. The portfolio is designed to generate stable, inflation-linked cash flows from essential infrastructure that supports public services. Through disciplined capital allocation and active portfolio management, HICL aims to deliver sustainable dividend growth and long-term increases in net asset value.
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