John Laing infra fund to raise further £156m

The proceeds from the new fundraising will be used to buy nine operational PPP projects from John Laing, increase a stake in an existing project, and reduce the fund’s debt. The fund is also in negotiations to acquire a ‘small portfolio of third-party social infrastructure assets’.

The John Laing Infrastructure Fund (JLIF), which raised £270 million (€311 million; $419 million) in a listing on the London Stock Exchange towards the end of last year, announced today that is going to raise £155.8 million in new capital.
The fundraising will be done via the issue of 148.35 million new shares priced at 105 pence per share. “The target dividend yield on the issue price is 5.7 percent,” JLIF indicated, adding that the share issue is expected to be completed by the end of October. JP Morgan Cazenove is acting as sponsor and sole bookrunner on the issue.
The listed fund will use the proceeds from the new fundraising to buy additional projects, reduce existing debt and fund future acquisitions, JLIF said. Among the new purchases, JLIF will acquire a portfolio of nine operational public-private partnerships from developer John Laing, which owns 20 percent of JLIF, and increase a stake in an existing project. The acquisitions are valued at £98.2 million, the fund said.
JLIF will also use the new equity raised to retire the debt it used in its recent £22.8 million purchase of a 50 percent stake in the Forth Valley Royal Hospital – Scotland’s largest healthcare Private Finance Initiative project and JLIF’s first third-party acquisition. The seller was the Commonwealth Bank of Australia.
“Following the recent successful purchase of Forth Valley, we hope also to acquire another small portfolio of third-party social infrastructure assets in due course in relation to which the fund is currently in advanced negotiations,” Paul Lester, JLIF’s chairman, announced in a statement.
Alongside yesterday’s disclosure of the acquisition of Forth Valley, JLIF also said that it had extended a revolving acquisition credit facility set up with Royal Bank of Scotland earlier this year by £35 million, taking the facility to a total of £60 million. 
JLIF has a long-term internal rate of return target of 7 to 8 percent.