Since 2007 NCP has been owned by Macquarie European Infrastructure Fund II (MEIF 2) , a wholesale investment fund that makes long-term investments in infrastructure and related businesses located across Europe. MEIF 2 invests in businesses which:
- Provide an essential service to the community
- Have a strong competitive position
- Generate stable cash flows over the long term
MEIF 2 aims to deliver sustainable cash yields and moderate capital growth from its diversified portfolio of quality infrastructure investments.
MEIF 2 is managed by Macquarie Infrastructure and Real Assets (Europe) Limited (MIRAEL). More information on MIRAEL is available through the MEIF 2 website link above.
Following the financial restructuring in April 2012 detailed below, MEIF 2 remains the majority shareholder, with the company’s senior lenders and management having minority shareholdings.
Please find the Annual Report for MEIF II CP Holdings 1 Ltd here and NCP here.
Following the global financial crisis the profitability of NCP had deteriorated for a number of reasons, principally:
- A moderate contraction in demand for car park services as a result of the difficult economic circumstances;
- An increase in the supply of parking, as stalled building projects have meant that developers have used the sites as temporary car parks;
- Inflexible and escalating property rental costs resulting from long-term leases and business rates.
The Group of companies comprising MEIF II CP Holdings 1 Ltd and its subsidiaries (“the Group”), of which NCP is the main trading company, had senior debt due for repayment in March 2014. Following an assessment of current and future trading outlook the Group decided that it was essential to strengthen the balance sheet and to improve the Group’s underlying profitability and liquidity position. Negotiations were entered into with MEIF 2, the senior lenders and those landlords where rents were materially higher than current market levels.
These discussions were successfully concluded on 27th April 2012 when the following changes were made to the Group’s capital structure and operating cost base:
- New equity of £50m was provided by MEIF 2, the majority of which will be available to provide liquidity for the future needs of NCP;
- Senior debt was reduced to £140m (including all liabilities on the interest rate swap) with repayment now extended to March 2018, representing a reduction of approximately 80%;
- Permanent rent reductions were achieved on the targeted sites.
Financial position following the restructure
The last consolidated audited accounts of the Group at 30 March 2012 showed net liabilities of £634m.
The restructure transforms this position:
- The group will now have net assets of £57m, on an unaudited proforma basis at 30 March 2012, including substantial cash balances resulting from the new equity injection;
- We have negotiated rent reductions with certain landlords of around £11m on an annualised basis;
- The interest burden on the senior debt and associated swaps is reduced by over 85%.
This gives NCP an excellent platform for future growth, supported by a stable financial structure, and makes it well placed to take advantage as the UK economy recovers. Equally importantly it gives it resilience if the economic recovery is delayed.