QUEENSLAND Investment Corporation has closed financing of €50 million (approximately $80 million) as part of a junior loan for HES International BV, one of Europe’s largest independent bulk handling companies.
The private debt infrastructure arm of QIC, a Queensland Government-owned investment company, committed the amount which forms part of a €220 million (about $353 million), six-year sustainability-linked junior loan.
HES International is one of the largest independent bulk terminal operators in Europe, headquartered in Rotterdam, Netherlands, with 15 terminals across five jurisdictions.
The company has a significant presence in European deep draft ports and the Amsterdam-Rotterdam-Antwerp region, an industrial center of Europe.
The junior loan forms part of a €1 billion ($1.6 billion) debt capital raise by HES to support the company’s growth and diversification strategy.
Nicholas Stockdale, head of QIC Private Debt Infrastructure Europe, was asked by DCN about what makes HES International a compelling investment opportunity for QIC, amongst a background of geopolitical and economic uncertainties in Europe currently.
Mr Stockdale cited HES’ portfolio of terminals across Europe and positional ability to capture trade flows into Europe’s industrial center, then commenting;
“We believe the diversity of operations and slate of products handled, long-term customer relationships established over many years, and over a century of experience, will protect against an adverse macroeconomic environment”, Mr Stockdale said.
Asked about any specific examples of where HES plans to allocate the funding, such as projects or initiatives, Mr Stockdale said, “This new debt package refinanced previous debt that was in place, and provides financing for future growth opportunities”.
“These opportunities are confidential; however growth capex is non speculative.”
Mr Stockdale also noted the transaction is the seventh private market loan investment for the Private Debt Infrastructure arm.
Though junior loans are typically based on a higher risks/ higher returns tactic, Mr Stockdale believes there is a continued positive outlook for junior infrastructure private market debt for the medium-term, with several factors combining to allow investors to benefit in current market conditions.
This includes the higher for longer interest rate environment.
“The relative value of junior infrastructure debt investments also continues to prove compelling”, Mr Stockdale said.
QIC also has significant maritime investments in Australia, including ownership percentages in the Port of Brisbane and Port of Melbourne, as well as full ownership of marine transport provider Sea Swift.
