GCP Infrastructure Investments Ltd on Wednesday said it has been unable to agree on structure and terms with RM Infrastructure Income PLC of a possible combination, and has therefore terminated discussions.

GCP Infra is a Jersey-based investment fund that specialises in UK infrastructure. RM Infra is an investor in loans to infrastructure assets.

Last month, GCP Infra and GCP Asset Backed Income Fund Ltd announced a proposed merger with RM Infra. GCP Asset is a London-based investor in UK asset-backed loans.

GCP Infra said it remains in discussions with GCP Asset over a proposed combination of the two investment companies.

‘Heads of terms have been agreed and a shareholder feedback exercise is being conducted,’ GCP Infra said.

GCP Infra had said that under the plan to merge with GCP Asset, it will commit to spend £200 million to the enlarged portfolio. £100 million will be used to reduce GCP Infra’s leverage to a target drawn balance of £50 million. £100 million will be distributed to shareholders via share buybacks, special dividends or other ways.

Meanwhile, RM Infra said it has decided to put forward proposals for a ‘managed wind-down’ of the company.

‘The board considers that approval of the managed wind-down will not result in an immediate liquidation of the company, rather an orderly realisation of the company’s underlying assets, with capital returned to shareholders as the company’s underlying loans are repaid to it, and its equity and warrant assets are realised in each case in a manner that seeks to maximise shareholder value,’ RM Infra explained.

GCP Infra shares were 1.2% lower at 73.64 pence each on Wednesday morning in London, while RM Infra shares were up 4.2% to 71.90p each. GCP Asset shares were 0.3% lower at 58.50p each.

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