Bilfinger sells concessions

German-based engineering and services group Bilfinger has divested its concessions portfolio, and a contract has been signed with BBGI, an infrastructure fund listed on the London Stock Exchange, to take over the projects available for sale from Bilfinger.

BBGI is planning a capital increase to finance the transaction. Earlier this year, the two parties agreed on BBGI’s acquisition of two additional projects in Canada.

Bilfinger said it would generate gross proceeds of €270 million from the two transactions, and that the capital gain was more than €50 million. Transaction costs and expenses for winding-up the discontinued concessions activities amount to more than €10 million. Several projects could be transferred to the buyer in the current year, with the remainder of the portfolio to be transferred in 2014.

Bilfinger will retain the M6 Duna and the M6 Tolna highways in Hungary, as well as the A1 in Germany in its portfolio. It said that in light of the development of traffic volumes, the A1 autobahn project was currently under review.

Bilfinger’s interim statement for the third quarter showed that the group developed positively in the quarter. Output volume, orders received and order backlog were said to have caught up with the previous year’s levels by the end of September, while adjusted EBITA (earnings before interest, taxes and amortization) for the third quarter was higher than in the same period of last year.

As well as divesting its concessions, a contract has been signed on the sale of Bilfinger’s road construction activities in Germany. Bilfinger Infrastructure is to be acquired by Betam in Frankfurt am Main, Germany. Bilfinger said that one reason for the sale was that the company’s competitiveness was limited in the German market for road improvements and repairs, which it said was dominated by small and medium-sized enterprises.

It said that as a result, its construction business segment has seen a loss of €15 million in relation to Bilfinger Infrastructure as of September 30, 2013. The sale leads to an expense of €5 million, which is presented as a special item under adjusted EBITA.

Adjusted EBITA of €253 million for the first nine months of the year was lower than the €268 million achieved in the same period a year earlier. However, Bilfinger said that there was an ongoing positive trend, as it increased to €107 million in the third quarter, compared to €104 million in the third quarter of 2012.