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Peterbrgh (Prg Hlth) (50PS)

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Thursday 02 April, 2015

Peterbrgh (Prg Hlth)

Receipt of Payment Deduction Notice

RNS Number : 3777J
Peterborough (Progress Health) plc
02 April 2015
 



RNS ANNOUNCEMENT

 

 

PETERBOROUGH (PROGRESS HEALTH) PLC - RNS ANNOUNCEMENT

 

For immediate release

 

2 April 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)

 

Receipt of Payment Deduction Notice

On 27 March 2015, the Peterborough and Stamford Hospitals NHS Foundation Trust (the "Trust") withheld £2,661,816.71 from the service payment of £3,847,878.22 which was due for payment to the Issuer in March 2015. The total amount withheld by the Trust from its service payments to the Issuer is £6,437,929.13.

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 January 2015. 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 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 or all remedial works deemed necessary.  A payment notice, in accordance with the Construction Contract, was therefore issued to Brookfield Multiplex Construction Europe Limited (the "Contractor") demanding payment for the sum of £3,023,575.16, which was settled in full by the Contractor on 25 March 2015.  The total sum of £1,128,805.89 (exclusive of VAT) has also been withheld by the Issuer from its payments to Brookfield Multiplex Services Europe Limited, in respect of the Trust's Hard FM services, in January, February and March 2015.

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 fulfilled its Debt Service Obligations on 2 April 2015, without the need to utilise cash standing to the credit of such reserve bank accounts or make a drawdown under the Liquidity Facility Agreement.

 

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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