Investing into Infrastructure Holding Companies: What if you become a core investment company?

Holding companies are quite common in the infrastructure sector since concessions often require a separate entity to be incorporated. That gives rise to the ‘CIC risk’, in the form of approval requirements, leverage limits and investment restrictions – which tends to make investors apprehensive. However, with careful structuring, much of that risk can be mitigated, and hold cos may even be able to walk away from the CIC classification altogether. And even if it were to become a CIC, the implications may not always be as severe as they appear at first glance.

In this analysis, we unpack the commercial and legal impact which CIC regulations can have on investors and holding companies. We also set out potential solutions which can be exercised to mitigate those risks.