HICL Infrastructure shares fell 0.8% to 173.9p in early morning trading on Monday after the investment trust reported two prospective acquisitions to portfolio.
The group confirmed the potential acquisition of a significant minority shareholding in US electricity transmission asset Texas Nevada Transmission, and the award of preferred bidder status for the assets linked to the Hornsea II offshore Wind Farm offshore transmission link.
HICL Infrastructure agreed to acquire a 45.75% shareholding in Texas Nevada Transmission from Manulife Investment Manager and John Hancock entities.
After the transaction, Texas Nevada Transmission will represent approximately 6% of HICL’s portfolio by value.
The agreement is projected to close before HICL Infrastructure’s FY 2023 end on 31 March 2023, and will be funded via the company’s £730 million credit facility, which is presently undrawn.
The potential acquisition represents HICL’s fifth North American investment, which is set to see the company partner with US electricity system developer and operator LS Power, with the agreement led by InfraRed America’s team, which operates across core and energy infrastructure.
“InfraRed is delighted to embark on this partnership with LS Power, a pre-eminent electricity system operator in the US,” said InfraRed head of core income funds Edward Hunt.
“TNT delivers long-term predictable income under regulated and contracted frameworks, while supplying an essential utility, bolstering network resilience and enabling the transition to renewable energy sources in the states of Texas and Nevada.”
“This acquisition fits firmly within HICL’s vision to support sustainable modern economies and is another example of InfraRed’s international footprint and network enabling HICL to execute its strategic priorities.”
The group’s bid for Hornsea II Windfarm has been submitted via its re-entered partnership with Mitsubishi subsidiary Diamond Transmission Corporation.
The consortium was selected by Ofgem as the preferred bidder to both own and operate the Hornsea II.
The consideration for HICL’s 75% share of the interest in Hornsea II is expected to represent approximately 3% of the company’s portfolio by value.
The firm said it expected the investment to achieve financial close in HY1 2023, and will reportedly be funded from HICL Infrastructure’s £730 million corporate credit facility.
