International Public Partnerships (INPP ) is aiming to pay off its corporate debt facility (CDF) in just eight weeks, leaving its balance sheet in a better position to tackle the discount with a potential buyback.

In a portfolio update, the company which has almost £3bn invested in public finance initiatives (PFIs) and public-private partnerships (PPP), reported it had sold Airband, a UK fibre-to-the-premises and fixed wireless network.

The money raised from the sale, along with free cashflow on the books, will allow INPP to reduce the balance of its CDF to £80m. In further good news for the balance sheet, the fund said it will be able to pay down the remaining £80m ‘within the next eight weeks’ thanks to ‘good progress on another divestment’.

When the sale is complete and the trust in a stronger financial position, the board plans to tackle the persistent double-digit discount the fund has suffered alongside its infrastructure peers, which derated heavily last year after the Liz Truss’ mini-Budget spiked gilt yields, making high-yielding infrastructure funds plunge.

INPP currently trades on a discount of 13.6% versus a 15.5% discount at peer HICL Infrastructure (HICL ) and an 11.6% discount at BBGI Global Infrastructure (BBGI ).

‘Once the board is in a position where it has repaid the cash-drawn balance of its CDF and has cash available, the board intends to consider what further measures, such as a share buyback, it may take to address the discount to net asset value at which the company’s shares are currently trading,’ said the fund.

The board said the current discount ‘undervalues the company’ and progress is being made to narrow it.

It said that the portfolio of 143 projects and developments, including schools, hospitals, and transport infrastructure, and its inflation linkage make the trust an attractive bet.

‘The thesis for infrastructure investment continues to be underpinned by key global trends and notwithstanding current market headwinds, the company will continue to ensure that its portfolio delivers long-term benefits for all stakeholders across the public and social infrastructure sectors in which it invests,’ said the company.

The next semi-annual valuation of the fund’s assets will not be until the end of March, INPP said ‘relevant government bond yields have increased modestly’ since the publication of the net asset value (NAV) in June, which came in at 155.2p per share.

Although ‘historically discount rates have not moved in lockstep with government bond yields’, the fund said the company is ‘not currently aware of any relevant valuation data points that would indicate a need to significantly change its discount rates’.

Cash generation also remains ‘in line with expectations’ and it is on track to meet its 2023 dividend target of 8.13p, which will be fully covered by operating cashflows.

The fund said it ‘does not need to make additional investments to deliver current projected returns’ and if no new investments are made, it would ‘be able to continue to meet its existing progressive dividend policy for at least the next 20 years’.

Any new investments that are made will be done through ‘recycling capital from the existing portfolio’ given that the current market conditions are ‘not optimal for raising new equity financing’.

‘Moreover, the economics of such opportunities would need to be considered against alternative capital allocation options while taking into account the longer-term strategic rationale,’ it said.