LONDON, Feb 5 (Reuters) - Infrastructure fund HICL is on track to deliver projected dividends for the next three years despite the impact on its investments from the collapse of British construction outsourcing company Carillion, HICL said on Monday.
HICL expects to pay total dividends of 7.85 pence per share for the financial year to March 31. It reaffirmed dividend guidance of 8.05 pence for 2019 and 8.25 pence for 2020, it said in an interim update.
Britain’s biggest corporate failure in a decade took place after banks pulled the plug on lending to Carillion. As a result, Carillion went into liquidation, forcing the government to step in to guarantee public services provided by the company, ranging from school meals to roadworks.
Fifteen of HICL’s infrastructure investments are in default under their loan agreements as a result of Carillion’s connections with the projects, HICL said. It said that 10 of its investments were in default last month.
The projects are unable to make distributions to investors, and HICL said this was expected to remain the case for a “number of months”.
HICL reaffirmed the estimated impact at about 50 million pounds ($70 million) of net asset value, adding to a prior provision of 9.4 million pounds.
HICL’s shares are down 6 percent since the collapse of Carillion in mid-January. HICL has 116 investments in infrastructure projects in Britain, Australia, Canada, France, Ireland and the Netherlands. ($1 = 0.7089 pounds) (Reporting by Carolyn Cohn; Editing by David Goodman)