HICL Infrastructure (HICL) is now in talks to sell a portion of the investment in Affinity Water for £25 million (US432 million) to repay the cost of the acquisition earlier this month.

 HICL announced it would look to raise £205 million (US$264 million) through a 'tap' issuance of new shares to replenish its funds 

As we reported in late May, a consortium formed by DIF Infrastructure IV, HICL Infrastructure Company Limited and Allianz Capital Partners on behalf of Allianz Group completed the acquisition of a 100% equity interest in the Affinity Water Group, the UK’s largest water only supply company.

The consortium members acquired from Infracapital and Morgan Stanley Infrastructure Affinity Water Acquisitions (Investments) Limited, indirect owner of 90 percent of Affinity Water for a consideration of £687 million (US$890 million), together with rights to acquire Veolia Water UK Limited’s 10 percent indirect stake in Affinity Water.

HICL and Allianz both picked up a 36.6% stake in the business for £269 million (US$348 million) each, while DIF Infrastructure will take a 26.9% stake. The company also holds net debt of £854 million to bring the total deal value to £1.6 billion (US$2 billion).

Affinity Water is the United Kingdom’s largest water only supply company by revenue and population served. It is licenced under the Water Industry Act 1991 and regulated by Ofwat. Affinity Water owns and manages the water assets and network in an area of approximately 4,515 km², split over three regions, comprising eight separate water resource zones, in the southeast of England. The company is the sole supplier of drinking water in these areas. Affinity Water supplies, on average, 900 million litres of water a day to over 3.6 million people, serving 1.5 million homes and businesses, together with operating 98 water treatment works.