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High Court throws out appeal against sale of Green Investment Bank to Macquarie

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Image: John Allan.

A High Court judge has ruled against a request for a judicial review of the government’s sale of the Green Investment Bank, paving the way for the deal to be completed with preferred bidder, the Australian bank Macquarie.

Sustainable Development Capital (SDCL) attempted to bring the case after its consortium had its bid for the bank rejected on 10 October when it was informed that Macquarie had been selected.

SDCL claimed Macquarie’s bid was not compliant with the rules of the bidding process and that its offer should therefore have been accepted instead. It also argued that the government acted “unlawfully, or unfairly” by awarding preferred status to a bidder which it said wasn’t compliant with the sales process.

However, Judge Lewis threw this out after deeming that there was no statutory framework in place governing the sale process, while the term “compliant” was not in fact suitable for either bid. SDCL’s consortium included a public sector body which could have blocked the privatisation process, while its eventual bid for just 75% of the Green Investment Bank could have done the same.

The appeal for a review was also dismissed after the judge ruled that the claim was not brought promptly by SDCL after it was notified that it had been unsuccessful in securing preferred bidder status.

Justice Lewis added: “Even if the claim had been brought in time, permission would have been refused as the grounds of claim do not disclose any arguable error on the part of the defendants.”

While securing Macquarie’s position as such, the High Court decision also revealed that the the government and Macquarie have now reached agreement in principle on the terms of the sale and are now in a position to sign a binding, contractual agreement providing for the sale of the bank.

In a statement after the ruling, SDCL's chief executive Jonathan Maxwell said the bidder would now have to accept the High Court’s decision despite believing it had “put the best possible solution forward”.

“We obviously hold profoundly different views to decision makers in the Government as to how to secure the best future or long term value for the Green Investment Bank. Views similar to ours have been raised by MPs from all political parties and many commentators in the market. We have tried our very best to deliver the best possible outcome, with the support of many of the largest financial institutions in the world, whom we thank for their support.

“At this stage however, we have to accept that this process has concluded, wish the best for the Green investment Bank and its prospective owners and seek alternative avenues to maximise the scale and effectiveness with which we can mobilise investment in green and sustainable infrastructure".

SDCL will now seek to redeploy up to £1 billion of capital raised for the bid through a new fund, SDCL EDGE. It will target capital commitments of £500 million, together with an additional £500 million of co-investment and financing from a number of the participants in the SDCL-led bidding consortium for the GIB. It is expected to make its first investments later this year.


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