Balfour Beatty announces third partial sale of M25 infrastructure asset

Further to the announcements on 21 and 29 December 2017, Balfour Beatty announces the sale of an additional 5 percent stake in Connect Plus, the company which operates the M25 orbital motorway.

The sale is for a cash consideration of £42 million, equivalent to the price of the earlier transactions, which is in excess of the Directors’ valuation as at 30 June 2017.  The expected profit on disposal on this transaction is £22 million. The proceeds from this transaction will be used to pay down borrowings in 2018.

In total, Balfour Beatty has now sold 25 percent of its original 40 percent holding for a total cash consideration of £207 million. The Group continues to own a 15 percent stake in Connect Plus.

The Group has sold the 5 percent stake to funds managed by Equitix Investment Management Limited (Equitix).  Further, Equitix exercised its option on the previous 7.5% partial sale so that the total 25 percent sell down is split equally between Equitix and Dalmore Capital Limited (Dalmore).

For the year ended 31 December 2016, Investments in Joint Venture & Associates in relation to the Group’s 5 percent interest in Connect Plus was £31million¹ and it contributed profit before tax of £3 million to the Group’s results.

Leo Quinn, Group Chief Executive, said: “This transaction again demonstrates the ongoing attractiveness of our infrastructure assets and is in line with our declared intent to maximise value for shareholders.”

¹The Investment in Joint Ventures and Associates at 31 December 2016 reflects the net position after financial asset and swap liability revaluations. These revaluations will be recycled to the income statement as part of the gain on disposal of the Group’s interest in Connect Plus.