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Peterbrgh (Prg Hlth) (50PS)

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Friday 01 May, 2015

Peterbrgh (Prg Hlth)

Formal Notice

RNS Number : 0730M
Peterborough (Progress Health) plc
01 May 2015
 



RNS ANNOUNCEMENT

 

 

PETERBOROUGH (PROGRESS HEALTH) PLC - RNS ANNOUNCEMENT

 

For immediate release

 

01 May 2015

 

PETERBOROUGH (PROGRESS HEALTH) PLC (the "Issuer")

£446,115,000, 5.58 per cent. Guaranteed Secured Bonds due 2042

(including up to £50,000,000 Variation Bonds) unconditionally and irrevocably guaranteed as to scheduled payments of principal and interest pursuant to a bond financial guarantee issued by FGIC UK Limited (the "Bonds")

(ISIN XS0308856276)

Standstill Agreements

Further to the RNS Announcement of 02 April 2015 relating to Payment Deductions made by the Peterborough and Stamford Hospitals NHS Foundation Trust (the "Trust"), on 29 April 2015 the Issuer and the Trust entered into a Standstill Agreement ("Trust Standstill") in respect of fire compartmentation issues and the potentially associated remedial works, in order to address the financial implications of continued Deductions while investigations and works are ongoing. The factual basis for the fire compartmentation issues and their contractual consequences under the terms of the Project Agreement have not yet been finally determined. The Trust Standstill limits the Trust's entitlement to claim Deductions and award Service Failure Points during the period in which the Trust Standstill is in force (the "Standstill Period") in order to allow for any remedial works, if required, to be carried out.

To protect the Issuer's position in respect of its obligations under the Trust Standstill, on 29 April 2015 the Issuer entered into a "back to back" Standstill Agreement (the "Brookfield Standstill") with Brookfield Multiplex Construction Europe Limited (the "Contractor") and Brookfield Multiplex Services Europe Limited ("Brookfield Services"). The terms of the Brookfield Standstill generally reflect the terms of the Trust Standstill.

Taken together, the Standstill Agreements should enable the Issuer to continue to fulfil its financial obligations, including making future scheduled payments of principal and interest on the Bonds, while the alleged issues are investigated and, where necessary, remedied. 

Summary of Payment Deductions

The Trust made Deductions from its Monthly Service Payments in January, February and March 2015, relating to the period 17 November 2014 to 31 January 2015, as it alleges Peterborough City Hospital (the "Hospital") was unavailable during this period as a result of fire compartmentation issues. The total Deductions withheld by the Trust amounts to £6,437,929.13. As a result of the Trust entering into the Standstill Agreement on 29 April 2015, no Deductions were made from its April 2015 Monthly Service Payment.

The Trust asserts these Deductions take into account the fact that the Hospital continued to be used by the Trust during the relevant period. The Trust's assertion that the Hospital was unavailable during the relevant period is based on certain alleged issues which have been identified as a result of surveys which have been undertaken at the Hospital on behalf of the Trust in respect of the Hospital's fire compartmentation.  The Issuer does not accept that the Hospital was unavailable during the relevant period, but is investigating these alleged issues, with the support of its subcontractors, as a matter of urgency. 

On 22 April 2015, the Issuer issued a Payment Notice to the Contractor, in accordance with the Construction Contract, demanding payment for the sum of £2,285,548.08 calculated as the amount withheld by the Trust from the Issuer's Service Payment in March 2015 less the amount withheld by the Issuer from its payments to Brookfield Services; the demand was settled in full by the Contractor on 30 April 2015. This is in addition to the Payment Notice issued for the sum of £3,023,575.16, which was paid by the Contractor on 25 March 2015.

The total amount of Deductions passed down to the Contractor amount to £5,309,123.24. The payments that have been withheld from Brookfield Services total £1,128,805.89. In combination, these amounts offset the sum of the Deductions made by the Trust in full.

Debt Obligations

The Issuer fulfilled its Debt Service Obligations on 02 April 2015, without the need to utilise cash standing to the credit of such available reserve bank accounts or make a drawdown under the Liquidity Facility Agreement.

The Issuer has fully passed down all Deductions from the Trust to the Contractor and Brookfield Services and, with the Standstill Agreements in place, will be in a position to meet its next Debt Service Obligations, due on 02 October 2015, without recourse to such available reserve bank accounts or the Liquidity Facility Agreement.

The Issuer is taking legal advice with respect to the matters mentioned in this announcement and reserves its position. 

 

Enquiries

The Issuer

Peterborough (Progress Health) PLC

8 White Oak Square

Swanley

Kent

BR8 7AG

 

Attention: Matt Rollings

 

 

The Principal Paying Agent

Bank of America, N.A.

3rd Floor, 2 King Edward Street

London

EC1A 1HQ

 

Attention: Daniel Trivic

 

 

The Bond Trustee

 

BofAML Trustees Ltd

3rd Floor, 2 King Edward Street

London

EC1A 1HQ

 

Attention: Colm Clarke

Important information

This announcement is not a prospectus, is distributed for information purposes only and does not constitute or form part of any offer or invitation to issue, acquire or dispose of any securities in any jurisdiction. Nothing in this document is intended to amount to an invitation or inducement to engage in investment activity. Nothing in this document amounts to the giving of advice. If you are in any doubt as to the action you should take, you should consult a professional adviser.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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