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Peterbrgh (Prg Hlth) (50PS)

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Tuesday 03 March, 2015

Peterbrgh (Prg Hlth)

Receipt of Payment Deduction Notice

RNS Number : 4440G
Peterborough (Progress Health) plc
03 March 2015






For immediate release


3 March 2015



£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)


Receipt of Payment Deduction Notice

On 27 February 2015, the Peterborough and Stamford Hospitals NHS Foundation Trust (the "Trust") withheld £3,443,429.04 from the service payment of £3,847,878.22 which was due for payment to the Issuer in February 2015. 

The Trust has asserted that the amount withheld was determined on the basis that the whole of the Trust's site was, for the purposes of the applicable contractual documentation, unavailable for part of the payment period ending on 31 December 2014. The Trust has further asserted that the amount withheld takes into account the fact that the site continued to be used by the Trust during the relevant period. The Trust's assertion that the site 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 Peterborough City Hospital on behalf of the Trust in respect of the Hospital's fire compartmentation.  The Issuer does not accept that the site was unavailable during the relevant period, but is investigating these alleged issues, with the support of its subcontractors, as a matter of urgency. 

The Trust has also confirmed that it intends to withhold amounts from future service payments until remedial works have been completed and the alleged unavailability has been rectified.  The Trust has confirmed its intention to enter into a stand-still arrangement on terms currently being negotiated, to enable the Issuer to continue to fulfil its financial obligations while the alleged issues are investigated and, where necessary, dealt with.   A further update on these discussions will be made in due course.

The Trust incorrectly deducted £327,200.32 from the service payment due to the Issuer in January 2015 and £781,612.34 from the service payment due to the Issuer in February 2015. Both amounts were repaid to the Issuer in full on 2 March 2015.

The Issuer has contractual rights under both the Hard FM and Construction Contracts to indemnities from its supply chain.  The Issuer is taking all necessary steps to enforce those indemnities against the supply chain and pass down all deductions imposed together with all costs incurred as a consequence of the alleged events of unavailability and any and all remedial works deemed necessary.

The Issuer is taking legal advice with respect to the matters mentioned in this announcement and reserves its position.  In the meantime, however, holders of the Bonds should be aware that the circumstances which led to the Trust withholding part of the service payment which was due for payment in February and the risk that the Trust may withhold further amounts from future service payments may have a material impact on the ability of the Issuer to comply with its obligations to make future scheduled payments of principal and interest on the Bonds.

In order to service its debt obligations under the Bonds, the Issuer may, subject to certain conditions being satisfied, utilise cash standing to the credit of one or more of the reserve bank accounts created for that purpose under the applicable contractual documentation, in addition to making a drawdown under the Liquidity Facility Agreement. 






The Issuer

Peterborough (Progress Health) PLC

8 White Oak Square





Attention: Matt Rollings



The Principal Paying Agent

Bank of America, N.A.

3rd Floor, 2 King Edward Street




Attention: Daniel Trivic




The Bond Trustee


BofAML Trustees Ltd

3rd Floor, 2 King Edward Street




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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