Balfour Beatty cashing in hospital stake

Balfour Beatty, Britain's biggest quoted construction company, is poised to sell its stake in one of the country's best-known private finance initiatives for about £70m.

It is understood that HICL, a listed infrastructure fund, has been chosen as the preferred bidder for Balfour's one-third share in University College Hospital in London. Hicl was vying with Barclays Infrastructure Funds for the deal.

The hospital became a symbol for critics of PFI, private-sector investment in public-sector schemes, when costs rose from £120m to £430m seven years ago. The project was to redevelop the hospital which was built in 1834.

With construction finished and the hospital operating, Balfour is cashing in its stake in the project.

Balfour is in the process of restructuring its UK business, which employs 12,000, and recently said it was looking for additional cost savings of £50m a year to 2015. The group has a programme in place to cut £30m of costs a year.