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Sat October 20 2018

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Balfour Beatty cuts M25 stake to 15%

20 Feb Balfour Beatty has sold another slice of its investment in the M25 private finance initiative, banking £22m in the process.

Connect Plus has a long-term PFI contract to look after the M25 for Highways England
Connect Plus has a long-term PFI contract to look after the M25 for Highways England

The sale of another 5% stake reduces Balfour Beatty’s holding in Connect Plus, the company which operates the M25 orbital motorway, from 20% to 15%.

In December 2017 Balfour Beatty sold a 12.5% stake in Connect Plus to funds managed by Dalmore Capital for £103m and a 7.5% stake to Equitix for £62m. The profit for Balfour Beatty on those deals was £85m.

It has now sold a further 5% to Equitix for a cash consideration of £42m. The expected profit on disposal is £22m, which will be used to reduce borrowings.

In total, Balfour Beatty has now sold 25% of its original 40% holding for a total cash consideration of £207m.

Equitix has exercised an option on the previous 7.5% sale so that the total 25% divested by Balfour Beatty is now split equally between Equitix and Dalmore.

Balfour Beatty chief executive Leo Quinn 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.”

In 2016 Skanska sold its 40% holding in Connect Plus to Macquarie for £265m.

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