TIDM40CZ
RNS Number : 6095U
Catalyst Healthcare (Manchester)Fin
30 July 2020
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.
In summary:
a) Central Manchester University Hospitals NHS Foundation Trust
(now, Manchester University NHS Foundation Trust) (the "Trust") has
issued unavailability notices to the Issuer's associated company,
Catalyst Healthcare (Manchester) Limited ("Project Co"), because of
alleged construction defects in respect of the fire doors and smoke
doors (the "Door Defects") at the Central Manchester University
Hospital (the "Hospital") forming part of Project Co's PFI
project;
b) the Issuer and Project Co have been working (and continue to
work) with the Trust, Lend Lease Construction (EMEA) Limited (the
"Contractor") and its supply chain to resolve these issues. The
vast majority of the Door Defects have now been remedied;
c) Project Co estimates that to date the Trust has accrued
alleged Availability Deductions of around GBP25 million in relation
to the Door Defects. The Trust has deferred taking any sum in
relation to these Availability Deductions (the "Deferred
Deductions");
d) there is a dispute as to the Trust's entitlement to the
Deferred Deductions. Project Co does not consider that the Trust
has any entitlement (the "Dispute"); and
e) following an adjudication between the Trust and Project Co
(which was decided in favour of Project Co), in order to finally
resolve the Dispute, on 22 November 2019, Project Co issued Part 7
court proceedings against the Trust, the Contractor and Lendlease
Construction Holdings (Europe) Limited) (the "Guarantor").
The Trust, Project Co, the Contractor and the Guarantor have now
entered into a settlement agreement in relation to the Dispute (the
"Settlement Agreement"). The Settlement Agreement will not become
fully effective until Project Co obtains written consent from the
Majority Creditors and Credit Providers (the "Funders").
The Settlement Agreement, should it become fully effective, will
settle the claim for the Deferred Deductions and it will prevent
the Trust from potentially terminating the Project Agreement in
reliance on the Deferred Deductions.
The key provisions of the Settlement Agreement are that:
1 the Trust's claims for the Deferred Deductions in relation to
the Door Defects are waived and released;
2 the Contractor will pay a sum of money to Project Co and a sum of money to the Trust;
3 Project Co will not pay any sums to either the Trust or the Contractor; and
4 all legal proceedings between the parties in relation to the
Door Defects and Deferred Deductions shall be discontinued with no
order as to costs.
Project Co 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 August 2020 (or such later
date as is agreed by the Trust, Project Co, the Contractor and the
Guarantor) (the "Long Stop Date"), then the Settlement Agreement
will lapse and be of no further effect.
If the Settlement Agreement were to lapse, then legal
proceedings between the parties would continue. If the Trust is
successful in the legal proceedings then the Trust would be
entitled to take the Deferred Deductions. In these
circumstances:
1 Project Co considers that it would be able to recover the
Deferred Deductions from the Contractor and/or the Guarantor;
and
2 the Trust would have grounds to terminate the Project
Agreement because of the level of the Deferred Deductions. However,
Project Co and the Issuer are hopeful that matters would be
resolved amongst the parties before it reached that stage.
Project Co and the Issuer continue to take legal advice with
respect to the matters mentioned in this Notice and keep the matter
under continual review.
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
c/o Albany SPC Services Limited,
3rd Floor,
3-5 Charlotte Street,
Manchester,
M1 4HB
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
30 July 2020
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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