February 5, 2018 / 7:14 AM / 10 months ago

BRIEF-HICL says on track to deliver 7.85 pence FY dividend

Feb 5 (Reuters) - Hicl Infrastructure Company Ltd:

* INTERIM UPDATE STATEMENT

* ‍MAJORITY OF PORTFOLIO CONTINUED TO PERFORM IN LINE WITH EXPECTATIONS​

* ‍COMPULSORY LIQUIDATION OF CARILLION IMPACTED A NUMBER OF HICL’S PPP PROJECTS​

* ‍AS AN IMMEDIATE PRIORITY, COMPANY AND INVESTMENT ADVISER ACTIVATED CONTINGENCY PLANS AT AFFECTED PROJECTS​

* ‍WORKING CLOSELY WITH OTHER STAKEHOLDERS TO ENSURE CONTINUED OPERATIONS​

* ‍INVESTMENT ADVISER’S ASSET MANAGEMENT TEAM IS WORKING WITH CARILLION’S LIQUIDATOR TO ENSURE FUNDS CONTINUE TO FLOW TO STAFF AND SUPPLIERS​

* ‍AT TIME OF ITS INTERIM RESULTS COMPANY TOOK A PROVISION AGAINST COUNTERPARTY RISK, ALTHOUGH ABRUPT COMPULSORY LIQUIDATION OF CARILLION WAS NOT ANTICIPATED​

* ‍BOARD REMAINS CONFIDENT IN COMPANY’S INVESTMENT PROPOSITION​

* ‍CASH GENERATION FROM PORTFOLIO, EXCLUDING 15 PROJECTS AFFECTED BY CARILLION PLC (“CARILLION”) LIQUIDATION, HAS BEEN IN LINE WITH EXPECTATIONS​

* ‍TEN PROJECTS WITHIN HICL PORTFOLIO HAD FACILITIES MANAGEMENT (“FM”) SUBCONTRACTS WITH CARILLION SUBSIDIARIES, AND LIQUIDATION OF CARILLION HAS TRIGGERED LOAN AGREEMENT DEFAULTS AT MOST OF THESE PROJECTS​

* ‍THERE ARE A FURTHER FIVE PROJECTS WHERE CARILLION WAS ORIGINAL CONSTRUCTION CONTRACTOR AND HELD RESPONSIBILITY FOR LATENT DEFECT RISK, AND THESE ARE THEREFORE ALSO TECHNICALLY IN DEFAULT UNDER THEIR LOAN AGREEMENTS​

* ‍PROJECTS WILL BE UNABLE TO MAKE DISTRIBUTIONS WHILST THEY REMAIN IN DEFAULT, WHICH IS EXPECTED TO REMAIN CASE FOR A NUMBER OF MONTHS​

* ‍ESTIMATED IMPACT IS RE-AFFIRMED AS APPROXIMATELY £50M OF NAV (EQUIVALENT TO 2.8P OF NAV PER SHARE, OR 1.8% OF NAV PER SHARE AS AT 30 SEPTEMBER 2017)​

* ‍COMPANY HAS MADE GOOD PROGRESS IMPLEMENTING ITS CONTINGENCY PLANS TO TRANSITION SERVICE PROVISION FROM ADMINISTERED CARILLION SUBSIDIARIES INTO NEW CONTRACTUAL ARRANGEMENTS​

* ‍IN SHORT TERM, ALL PROJECTS ARE STABLE, WITH SERVICES RUNNING AS NORMAL​

* ‍ONE PROJECT (REPRESENTING 1.3% OF PORTFOLIO VALUE AT 30 SEPTEMBER 2017) HAS ALREADY TERMINATED ITS FACILITIES MANAGEMENT CONTRACT WITH CARILLION AND TRANSFERRED TO AN INTERIM ARRANGEMENT WITH A NEW SERVICE PROVIDER​

* ‍COMPANY REMAINS ON TRACK TO DELIVER AGGREGATE DIVIDENDS OF 7.85P PER SHARE THIS FINANCIAL YEAR AND BOARD REAFFIRMS 8.05P DIVIDEND GUIDANCE FOR NEXT FINANCIAL YEAR ENDING 31 MARCH 2019​

* ‍ADDITIONAL GUIDANCE OF 8.25P FOR FINANCIAL YEAR ENDING 31 MARCH 2020​

* ‍GROUP WILL HAVE DRAWINGS ON ITS REVOLVING CREDIT FACILITY OF APPROXIMATELY £130M AT 31 MARCH 2018​

* ‍GROUP COMPLETED REFINANCING OF ITS REVOLVING CREDIT FACILITY, WITH AN IMPROVED MARGIN OF 1.65% OVER LIBOR, WHICH EXPIRES IN MAY 2021​

* ‍INVESTMENT ADVISER IS REVIEWING COMPANY’S KEY INFORMATION DOCUMENT IN LIGHT OF GUIDANCE PUBLISHED ON 24 JANUARY 2018 BY FINANCIAL CONDUCT AUTHORITY​ Source text for Eikon: Further company coverage:

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