GCP Infrastructure Investments (LSE:GCP), which targets infrastructure projects backed by long-term, public sector revenues, said a borrower has repaid in full the approximately £31.5 million outstanding under a loan secured against a portfolio of UK operational renewable energy projects.
The loan was originally due to mature in June 2035, but repayment was brought forward by agreement following a change of control at the borrower.
The prepayment is materially in line with the valuation already included in the Company's net asset value as at 30 June, and the loan was one of GCP Infra's lower-returning investments relative to the portfolio's average annualised interest rate of 8.0% at that date.
The company confirmed its supported social housing disposal, flagged in a 20 July announcement, remains on track to complete in the coming months, and that its revolving credit facility remains fully undrawn.
Proceeds will be applied under GCP Infra's published capital allocation policy, and given the current discount at which its shares trade to net asset value, any excess cash will continue to fund the Company's share buyback programme.
News Intelligence what this means for the company
GCP Infrastructure received a £31.5 million early prepayment on a renewable energy loan originally due in June 2035, triggered by a change of control at the borrower. The prepayment aligns with the company's existing net asset value and came from one of its lower-returning investments (below the portfolio's 8.0% average rate), so the cash release is not a valuation surprise; proceeds will flow to share buybacks given the current discount to NAV and an undrawn revolving credit facility.
The prepayment removes a below-average-yield asset and frees cash for buybacks at a discount to NAV, a modest positive for per-share value. However, the loan's early exit was already reflected in the NAV, so this is a realization of existing value rather than a new gain.
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