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Name | Symbol | Market | Type |
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Catalyst H.r Bd | LSE:40CZ | London | Bond |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
TIDM40CZ
RNS Number : 7265W
Catalyst Healthcare (Manchester)Fin
28 April 2016
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF HOLDERS OF THE BONDS. IF HOLDERS OF THE BONDS ARE IN ANY DOUBT AS TO THE MEANING OR IMPORT OF THE CONTENTS OF THIS NOTICE OR REQUIRE FURTHER ADVICE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS (INCLUDING IN RESPECT OF ANY TAX CONSEQUENCES).
Catalyst Healthcare (Manchester) Financing PLC (the "Issuer")
GBP218,050,000, 2.411 per cent. Index-linked Guaranteed Secured Bonds due 2040
(including up to GBP38,000,000 Variation Bonds) unconditionally and irrevocably guaranteed as to scheduled payments of principal and interest pursuant to a bond financial guarantee issued by AMBAC Assurance UK Limited (ISIN XS0208052265) (the "Bonds")
NOTICE
To the holders of the Issuer's Bonds
Settlement Agreement with Central Manchester University Hospitals NHS Foundation Trust
Unless otherwise provided, terms defined in the Master Definitions Schedule dated 8 December 2004 (as the same may be amended, varied or supplemented from time to time) shall have the same meaning where used in this Notice.
This announcement is made further to the RNS Announcement made by the Issuer on 25 August 2015 relating to unavailability notices issued by Central Manchester University Hospitals NHS Foundation Trust (the "Trust") to the Issuer's associated company, Catalyst Healthcare (Manchester) Limited ("ProjectCo"), in relation to alleged defects in the fire stopping at Central Manchester University Hospitals (the "Hospital") ("the Alleged Firestopping Defects").
As notified in the 25 August 2015 RNS Announcement, as of that date, the Trust claimed that it was entitled to make unavailability deductions in relation to the Alleged Firestopping Defects totalling GBP11.2 million.
Since the 25 August 2015 RNS Announcement, the Trust has deferred additional unavailability deductions in respect of the Alleged Firestopping Defects. As of the date of this RNS Announcement, the total level of unavailability deductions claimed by the Trust in respect of the Alleged Firestopping Defects totals approximately GBP33,000,000.
All unavailability deductions applied by the Trust to date have been passed down in full to ProjectCo's supply chain as, in accordance with legal advice, ProjectCo is permitted to do under the terms of its sub-contracts. The Trust's entitlement to make such unavailability deductions has been disputed by ProjectCo and by its supply chain.
The Trust, ProjectCo and Lend Lease Construction (EMEA) Limited (the "Contractor") have now entered into a confidential settlement in relation to the Alleged Firestopping Defects (the "Settlement Agreement"). The Settlement Agreement will not become fully effective until ProjectCo obtains written consent from the Majority Creditors and Credit Providers (the "Funders").
The Settlement Agreement, if it becomes fully effective, will settle the claimed and potential future unavailability deductions in respect of the Alleged Firestopping Defects and prevent the Trust terminating the Project Agreement in reliance on such unavailability deductions.
The key provisions of the Settlement Agreement are that:
1 the Trust's claims for unavailability deductions (regardless of whether they have been levied or deferred) in relation to the Alleged Firestopping Defects are waived and released;
2 the Contractor will pay a sum of money to ProjectCo in instalments (the "Settlement Monies") and Project Co will pay the Settlement Monies to the Trust;
3 the Trust will pay to ProjectCo all the sums which it has deducted from monthly service payments in respect of the Alleged Firestopping Defects and Project Co will repay those sums as it has withheld and, as applicable, to its supply chain;
4 the Trust, at its own cost, will assume responsibility for and carry out and properly complete all remedial works relating to the Alleged Firestopping Defects;
5 the Trust will undertake responsibility for completing the works and estimates it will take them a further 18-24 months to complete;
6 the Trust will not apply any unavailability deductions in relation to the Alleged Firestopping Defects and the remedial works which it will now undertake;
7 the Trust will not seek to terminate the Project Agreement based on any historic or future unavailability deductions in relation to the Alleged Firestopping Defects;
8 a new regime for unavailability deductions has been agreed (the "Future Availability Regime") which means that disputed unavailability deductions can generally now only be applied once a formal dispute resolution process has been adhered to by the parties. Further, under the Future Availability Regime, unavailability deductions will generally begin to accrue later than currently provided for under the Project Agreement;
9 ProjectCo will make a contribution as part of these arrangements, the effect of which will not have a material adverse effect on the cover ratios; and
10 ProjectCo has agreed to make certain adjustments to the insurance costs sharing provisions in the Project Agreement.
ProjectCo is seeking the consent of the Funders to the terms of the Settlement Agreement in accordance with the terms of the Security Trust and Intercreditor Deed.
If such consent is not received by 31 May 2016 (or such later date as agreed by the Trust, ProjectCo and the Contractor) (the "Long Stop Date"), then the Settlement Agreement will lapse and be of no further effect save that the Trust will not be entitled to levy unavailability deductions in relation to the Alleged Firestopping Defects for the period between 19 April 2016 and one month after the expiry of the Long Stop Date.
If the Settlement Agreement were to lapse and the Trust were to apply the unavailability deductions which it has deferred and/or make further unavailability deductions in relation to the Alleged Firestopping Defects, legal advice that ProjectCo has received indicates that it will be able to allocate and recover these in full from the Contractor and/or ProjectCo's wider supply chain. However, depending on the quantum of the unavailability deductions and the timing of any recovery, project cash flows may be adversely affected such that it would have a material impact on the ability of the Issuer to comply with its obligations to make scheduled payments of principal and interest on the Bonds.
If the Trust was to apply a significant part of the unavailability deductions which it has deferred and should it be found to be entitled to do so, it is possible that the Trust would be entitled to terminate the Project Agreement as a result of ProjectCo having incurred this level of unavailability deductions in the previous 12 months.
A further update will be given in due course.
Enquiries
If you have any enquiries, please direct them to the Issuer
The Issuer
Catalyst Healthcare (Manchester) Financing PLC
Albany SPC Services Ltd
Adamson House
Towers Business Park
Wilmslow Road
Didsbury
Manchester M20 2YY
Attention: Ailison Mitchell
The Principal Paying Agent
The Bank of New York Mellon,
International Corporate Trust Services,
Merck House, Seldown,
Poole, Dorset,
BH15 1PX
The Bond Trustee
Law Debenture Trustees Limited
Fifth Floor, 100 Wood Street,
London
EC2V 7EX
This notice is given by Catalyst Healthcare (Manchester) Financing PLC
28 April 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCIPMATMBJTBLF
(END) Dow Jones Newswires
April 28, 2016 11:41 ET (15:41 GMT)
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