BBGI SICAV has announced that it has signed an agreement to invest in five existing PPP projects and gain access to what it describes as, “a robust pipeline of future PPP projects in Canada”. The agreement is with a subsidiary of SNC-Lavalin Group to invest in an investment vehicle (referred to as a “Partnership”) which will hold substantial equity interests in five PPP projects in Canada. BBGI SICAV says that all assets are operational and classified as availability-based under its investment policy.
Under the partnership, BBGI and SNC-Lavalin will hold 80 per cent. and 20 per cent. partnership interests, respectively, while a subsidiary of SNC-Lavalin will act as the Partnership’s general partner.
Partnership has first offer agreement
BBGI SICAV says that, as part of the transaction and through the Partnership, it will benefit from a vend-in (pipeline) agreement that provides the Partnership a right of first offer with respect to the potential future acquisition, of select interests in SNC-Lavalin’s robust pipeline of Canadian availability-based PPP projects currently under construction. The company says that this is expected to create additional investment opportunities once the assets become operational.
BBGI SICAV says that SNC-Lavalin, with a market capitalisation of approximately CA$8 billion (approximately £4.75 billion), is the largest engineering company in Canada, one of the leading engineering and construction groups in the world and a major player in the ownership of infrastructure. Founded in 1911, it is a leader in the PPP market in Canada and has over the years built up an extensive portfolio of PPP assets.
BBGI SICAV expands credit facility
BBGI SICAV says that it has increased the total commitment amount available under its existing credit facility with ING Bank and KfW IPEX-Bank from £110 million to £180 million, which it says will leave approximately £155 million available to be drawn. The margin on the £70 million commitment increase will be unchanged at 185 bps.
The Five Canadian PPP Projects
The initial five assets to be held by the partnership are:
The William R. Bennett Bridge is a 2 km corridor that straddles Okanagan Lake to connect two communities, Kelowna and West Kelowna, in the interior of British Columbia. The project became operational in 2008 and the concession runs until 2035. Availability payments are received from the Province of BC (AAA rated by S&P). SNC-Lavalin owns 100% of the project equity.
Canada Line is a 19.5 km automated rail-based rapid transit service connecting downtown Vancouver with Richmond and the Vancouver International Airport. The project became operational in 2009 and the concession runs until 2040. Availability payments are received from Translink (Aa2 rated by Moody’s). SNC-Lavalin owns 33.3% of the project equity.
Southeast Stoney Trail is a 25 km highway that is part of the Calgary Ring Road network. The project became operational in 2013 and the concession runs until 2043. Availability payments are received from the Province of Alberta (AA+ rated by S&P). SNC-Lavalin owns 50% of the project equity.
Restigouche Hospital Centre is a 33,500 m2 hospital with 140 beds located in Campbellton, New Brunswick. The project became operational in 2013 and the concession runs until 2044. Availability payments are received from the Province of New Brunswick (A+ rated by S&P). SNC-Lavalin owns 100% of the project equity.
McGill University Health Centre (“MUHC”) is a 214,000 m2 hospital with 500 private patient rooms located in Montreal, Quebec. The project became operational in 2014 and the concession runs until 2044. Availability payments are received from MUHC, which is rated A (high) by DBRS. SNC-Lavalin owns 60% of the project equity.
The agreed total cash consideration payable by the Company for the five initial project interests is expected to be approximately CA$208 million, which will be funded from the Company’s existing cash resources and drawings under its extended credit facility.
BBGI SICAV existing portfolio
BBGI currently owns a portfolio of 39 infrastructure assets. These projects are PPP assets and are supported by contracted, public sector-backed revenue streams, with inflation-protection characteristics.
About BBGI SICAV
BBGI SICAV SCA is a closed-ended investment company incorporated in Luxembourg, listed on the main market of the London Stock Exchange. BBGI has a portfolio consisting of PFI/PPP assets diversified by geography and sector across availability-based road projects and a range of social infrastructure projects. The projects are located in the UK, continental Europe, Canada and Australia. BBGI changed its name from Bilfinger Berger Global Infrastructure on 1 May 2014.
BBGI SICAV invests in five Canadian PPP Projects with first offer agreement : BBGI