Skanska has signed a Sale and Purchase Agreement (SPA) for its investment in the M25 motorway in London, UK, for about SEK2.9 billion (US$335.3 million).

The buyer, Edge Orbital Holdings Limited, is a consortium of institutional investors arranged and advised by Macquarie Capital (Europe) Limited. It is formed by Dalmore Highway Investment Holdings, GCM Infrastructure and Equitix Orbital Holdings.

The transaction is expected to be recorded by Skanska Infrastructure Development in the first quarter of 2017.

Skanska is divesting its 40% ownership in Connect Plus, who is managing the M25 orbital motorway that encircles almost all of Greater London. In addition to Skanska, Connect Plus shareholders include Balfour Beatty, Atkins and Egis. The project is carried out as a Public Private Partnership (PPP).

The project comprises renovation and widening of two sections in the North East and North West quadrants of the M25 North of London. A total of 63 km are being widened from three to four lanes in each direction, much of the widening work is already done. The widening is between junctions 16 to 23 and 27 to 30. 

The project involves the design, construction, financing, operation and maintenance of the M25 motorway for 30 years for the British Highways Agency. The operation and maintenance undertaking is being carried out by joint venture between Balfour Beatty, Atkins and Egis.

The project was founded through: a £700 million of commercial bank debt and a £215 million EIB guarantee, a £185 million unguaranteed EIB structured finance facility and shareholder equity of £200 million. The total project investment was £1085 million (US$1557 million).

The M25 is one of the world’s busiest motorways, also known as the London Orbital Motorway, connects the entire Greater London. Up to 200,000 vehicles per day use the most heavily trafficked sections.

Completion of the sale is subject to, among other, consent of Highways England Company Limited. The final purchase price may be adjusted as a result of certain conditions. It is anticipated that completion of the divestment will take place early 2017.