Renew Holdings PLC Buy-in of Pension Scheme Liabilities (3567H)
December 03 2020 - 2:00AM
UK Regulatory
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RNS Number : 3567H
Renew Holdings PLC
03 December 2020
3 December 2020
Renew Holdings plc
("Renew" or the "Group")
Buy-in of Pension Scheme Liabilities
Renew (AIM: RNWH), the leading Engineering Services Group
supporting UK infrastructure, is pleased to announce that o n 26
November 2020, the Trustee of the Lovell Pension Scheme (Lovell
Scheme), in consultation with the Board of Renew, entered into a
"buy-in" agreement with a specialist insurer.
This transaction will ensure the security of the benefits of the
Lovell Scheme's pensioners and deferred members and while the Group
remains legally responsible for the Lovell Scheme, the transaction
has eliminated all of the Group's exposure to investment and
funding risks in the Lovell Scheme. The transaction also improves
the long-term security of members' benefits within the Lovell
Scheme. Following the conclusion of this buy-in, and previous
buy-ins that occurred in 2011 and 2016, all of the Lovell Scheme's
liabilities will now be matched with corresponding annuities.
Whilst no further material contributions are now expected to be
made to the Lovell Scheme, the Board has decided to investigate the
opportunity of diverting those contributions into another of the
Group's defined benefit pension schemes, the Amco Scheme, to see if
that would enable the Amco Scheme to fully buy-in its liabilities
over a shorter time scale than had previously been envisaged. Based
on current estimates, the Directors believe that diverting the
equivalent of one year's worth of contributions from the Lovell
Scheme into the Amco Scheme is likely to be sufficient to achieve a
buy-in of its remaining liabilities. Once the funding risk has been
removed from both schemes there will be an immediate, material
improvement to the Group's cash flow.
The "buy-in" will be completed by using Lovell Scheme assets to
purchase annuities from the specialist insurer which match
corresponding pension liabilities, where the annuity policy remains
an asset of the Lovell Scheme.
Sean Wyndham-Quin, Renew's CFO, commented:
"We are very pleased that the Trustee of the Lovell Scheme has
completed the recent buy-in with a specialist insurer. This
transaction significantly de-risks the Group's balance sheet,
further reduces the Group's pension exposure risks and improves the
Group's cashflow in the medium term. We are now focused on trying
to fully buy-in our liabilities with the Amco Scheme to further
reduce the Group's pension exposure in line with our strategy."
For further information, please contact:
Renew Holdings plc www.renewholdings.com
Paul Scott, Chief Executive Officer via FTI Consulting
Sean Wyndham-Quin, Chief Financial 020 3727 1000
Officer
Numis Securities Limited (Nominated
Adviser)
Stuart Skinner/ Kevin Cruickshank 020 7260 1000
FTI Consulting (Financial PR) 020 3727 1000
Alex Beagley / James Styles / Renew@fticonsulting.com
Sam Macpherson / Rafaella de Freitas
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
About Renew Holdings plc
Renew Holdings Group plc is a leading UK Engineering Services
business, performing a critical role in keeping the nation's
infrastructure functioning efficiently and safely. The Group
operates through independently branded subsidiaries across its
chosen markets, delivering non-discretionary maintenance and
renewal tasks through its highly skilled, directly employed
workforce.
Renew's activities are focused into two business streams:
Specialist Engineering, which accounts for over 90 per cent of the
Group's adjusted operating profit, focuses on the key markets of
Rail, Infrastructure, Energy (including Nuclear) and Environmental
which are largely governed by regulation and benefit from
non-discretionary spend with long-term visibility of committed
funding.
Specialist Building focuses on the High Quality Residential and
Science markets in London and the Home Counties.
For more information please visit the Renew Holdings plc
website: www.renewholdings.com
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