10th Jan 2006 07:00
Balfour Beatty PLC10 January 2006 10 January 2006 BALFOUR BEATTY COMPLETES PFI EQUITY TRANSACTIONS FOR EDINBURGH ROYAL INFIRMARY AND CONNECT ROADS =============================================== Two deals demonstrate continued confidence in the quality and value of PFI assets and ability to secure superior market returns ---------------------------------------------------- Balfour Beatty, the international engineering, construction and services group,announces today that it has completed two separate transactions in the PFIequity market. Balfour Beatty Capital Projects, the specialist PFI/PPP arm ofthe Group, has increased its shareholding in Consort Healthcare's EdinburghRoyal Infirmary PFI concession from 42.5% to 73.9%. It has also sold a 15%interest in three of the roads in the Connect Roads portfolio, previously 100%owned. These transactions, which have a net cash cost of £18.1 million, take thetotal commitment of Balfour Beatty's equity investment in PFI projects to £284million. Commenting today, Balfour Beatty Chief Executive, Ian Tyler, said: "These transactions demonstrate our continued confidence in the value andquality of our PFI assets and further illustrate our commitment to developingand maintaining an active PFI investment portfolio. We expect further suchopportunities to arise in the future. "Our development capability, operating expertise and proven capability infinancial structuring gives us the confidence to properly value PFI projects andbest realise superior market returns from our equity investments." Balfour Beatty has acquired 31.4% of the equity in the Edinburgh Royal Infirmaryhealthcare PFI for a consideration of £31.6 million, valuing the total equity inthe project at approximately £100 million. Infrastructure Investors LP (I2),who previously owned 15%, have increased their interest to 26.1% of the equity. The transaction reflects Balfour Beatty's confidence that the project willcontinue to deliver an attractive market return. Through this transaction,Balfour Beatty has further consolidated its position as a market-leadingdeveloper and investor in the healthcare market. Through Consort Healthcare andHMU, it now has four active concessions and three preferred bidder positions inlarge hospital projects. The Group now has £114 million of committed investmentin this sector. In a separate transaction, Balfour Beatty has also sold 15% of three of theconcessions in Connect Roads, its PFI road concession portfolio, to I2 for£13.5 million, with Balfour Beatty retaining 85% of the economic interest in theconcession. The disposal generates an exceptional profit of £5.7 million overbook value. The current total equity in Connect Roads is now valued at over £90million. As Balfour Beatty and I2 will exercise joint control over these roadconcessions, this transaction will lead to a deconsolidation of £227 million ofassociated net debt from the Group's balance sheet and will simplify and clarifythe presentation of its PFI results. These concessions produced profit beforetaxation of £8 million for the year ended 31 December 2004 and had gross assetsof £340 million at 31 December 2004 under UK GAAP. ENDS Enquiries to:Tim SharpTel: 020 7216 6884www.balfourbeatty.com Notes to Editors---------------- 1. Balfour Beatty has equity interests in 22 PFI projects. These are: - 7 hospital schemes, three at preferred bidder stage - 5 schools schemes, one at preferred bidder stage - 4 road schemes - 2 street lighting schemes - 2 schemes under the London Underground PPP - 1 scheme for the LUL power supply system - 1 wastewater scheme. 2. Balfour Beatty is a world-class engineering, construction and services group, well positioned in infrastructure markets which offer significant growth potential. Its partnerships with public and private customers generate secure, sustainable income. Its financial position, with significant net cash and with strong operating cash flows, offers continuing flexibility to add additional capacity and expertise to the business mix and to make appropriate investments in PPP and other long-term growth opportunities. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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