Epic looks to shed interests in Britain

River Thames. Photo / Supplied

A New Zealand private equity partnership specialising in infrastructure investment is looking to sell its United Kingdom assets, including an indirect interest in London-based utility, Thames Water.

The partnership, Equity Partners Infrastructure Co (Epic), is partly owned by the Pyne Gould Guinness unit Torchlight and is closely associated with Australia's biggest investment bank - Macquarie Group.

Epic is also looking to exit from its holding in Moto, a leading motorway service area operator in the UK.

This year Epic said Torchlight had provided it with $12 million bridge facility so that it could participate in the recapitalisation of Moto, which last year said it would suspend dividends so that it could reinvest in growth.

Epic, which has about $155 million in assets and 1900 shareholders, is the process of offloading all four of its UK assets - including small stakes in gas network company Wales and West, and Arqiva, a UK broadcast transmission service provider - but the value of the New Zealand dollar, currently worth about 50p, is proving to be one of a number of sticking points.

Epic made a $11.2 million loss for the six months to September 30 - partly reflecting unrealised currency losses over the period - compared with a loss of $2.9 million in the previous corresponding period.

The company said this month that it had been testing the market for its holding in Thames Water.

"These soundings and subsequent discussions have given the board an indication of the range of prices we could achieve through a sale of Thames Water, and we have received expressions of interest at this stage in our holdings of Arqiva and Wales & West Utilities," chairwoman Margaret Devlin said.

Epic is also investigating a transaction to release value from Epic's Moto stake. Epic had received an approach from another party which the company was evaluating, she said.

Devlin said results from Thames Water and Moto had been positive but Epic "continues to be hampered by the lingering weakness in the UK pound".

There are just two people on the Epic board: Devlin and PGG managing director John Duncan, who is a former Macquarie executive.

FOR SALE

* Thames Water: A water and wastewater company providing drinking water to 8.5 million people and wastewater services to 13.6 million. Epic holds 2.61 per cent of the issued capital of Thames Water Holding Co, which holds 47.65 per cent of the issued capital of Thames Water.

* Moto Hospitality: A leading operator of service areas on motorways and trunk roads in the UK. Epic, through a subsidiary, holds 17.49 per cent of the issued share capital of Moto International.

* A small investment in MGN Gas Networks (UK), the ultimate holding company of Wales & West Utilities Ltd, a UK based gas network provider.

* A holding in Macquarie UK Broadcast Holdings, the ultimate holding company of Arqiva, a UK-based broadcast and transmission service provider.