International Public Partnerships Limited ("INPP” or “the Company") is pleased to advise that the East London & City LIFT Company Limited (ELL) has reached financial close on the South East Resource Centre (SERC) LIFT project. The project was developed by the Company’s Investment Advisor, Amber, on behalf of INPP and includes the design, build, finance and operation of a 2,254m2 resource centre on part of the old Hackney Hospital site in Hackney, East London. INPP is investing £197,000 by way of subordinated debt in the project paying a fixed 13% coupon. Additional dividend returns are forecast to be earned at the end of the project’s life as a result of the Company’s investment interest in ELL. Ashley House is the design & build contractor with G4S providing facilities management services. Construction of the project will commence immediately and is scheduled for completion in June 2011.
The investment is part of INPP’s interest in ELL, which provides INPP with the exclusive right to invest in projects developed for the East London Primary Care Trusts (PCT), including City & Hackney Teaching PCT, Tower Hamlets PCT and Newham PCT, for a 20 year period expiring in 2023. INPP already has interests in seven ELL projects, as well as 18 further LIFT projects around the country on behalf of several other PCTs, in which Amber or INPP also enjoys long-term investment rights.
The SERC is the first of four projects which are scheduled to reach financial close this year in ELL with a combined total development value expected to be in excess of £42 million. INPP expects to invest around £1 million in subordinated debt across the four projects, should they reach financial close, each carrying a similar coupon to that noted for SERC.
In addition to the project being immediately accretive to the portfolio, it also meets the Company's other key investment criteria including:
- Project revenues linked to inflation (U.K. RPI)
- Long-term 25 year project term ending in 2035
- Significant ownership interest and influence over project operations, including Board representation
- Debt facility in place, and 100% swapped at a fixed rate for the life of the concession. Debt has been provided by Royal Bank of Scotland (RBS).
Giles Frost, Director of the Company said: "We are delighted to reach financial close on a further project as part of our longstanding relationship with ELL and our consortium partners, G4S and Ashley House. The South East Resource Centre was one of eleven priority projects discussed with INPP investors as part of the recent capital raising and we are pleased to deliver on the first of those projects.”
“As previously indicated, the Company expects to invest the outstanding monies raised within six to twelve months and we look forward to updating our investors with further developments over the coming months."
For further information:
Bianca Francis +44 (0)20 7939 0558
Amber Fund Management Limited
Nick Westlake +44 (0)20 7260 1345