Sale of 15% shareholding in InterCity Express Programme (IEP) Phase 1 project
The IEP Phase 1 project comprises a 27.5-year contract to design, manufacture, finance, deliver into daily service and maintain a fleet of 57 InterCity Express Trains and the construction and/or refurbishment of three associated depots for the Great Western main line in the UK. Hitachi Rail Europe is responsible for supplying the trains and ensuring they perform reliably on a daily basis.
The consideration, which is in excess of John Laing's most recent portfolio valuation as at 31 December 2017, is £227.5 million (net of costs) and will be satisfied in cash. The transaction is subject to customary anti-trust approval, and consents from the senior lenders to the project and completion is expected to take place in Q2 2018. John Laing intends to recycle the capital into future investment commitments, in line with the Company's self-funding model. As at 31 December 2017, the Group's pipeline of opportunities in PPP and renewable energy amounted to £2.15 billion, including nine shortlisted PPP bids due to close within 18 months and four exclusive renewable energy positions, together representing an investment opportunity of approximately £350 million.
On 8 March 2018, the Company announced its results for the year ended 31 December 2017 at the same time as a 1 for 3 rights issue. At the time, John Laing indicated that the sale of its 15% interest in IEP Phase 1 could be announced during the rights issue period. John Laing also gave guidance for divestments in 2018 to be broadly in line with guidance for investment commitments (before taking into account the rights issue) of approximately £250 million. This sale of its remaining 15% interest in IEP Phase 1 is consistent with that guidance for divestments.
Olivier Brousse, John Laing's Chief Executive Officer, said:
"We are pleased to have realised good value for our investment and to have taken a major step towards our divestments guidance for the year. Our partnership with Hitachi continues through our investment in the IEP Phase 2 project for the East Coast main line with first train delivery expected by the end of this year"
James Isola / Robbie Hynes,
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