TIDM40CZ

RNS Number : 0657U

Catalyst Healthcare (Manchester)Fin

19 October 2017

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

Deductions from Service Payments

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.

Central Manchester University Hospitals NHS Foundation Trust ("the Trust") has issued unavailability notices to the Issuer's associated company, Catalyst Healthcare (Manchester) Limited ("Project Co"), because of alleged defects in respect of the fire doors and smoke doors (the "Doors") at the Central Manchester University Hospitals (the "Hospital") forming part of Project Co's PFI project.

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 Trust has advised that, to the end of September 2017, it has accrued unavailability deductions of approximately GBP3.7 million in relation to the Doors. There is a dispute as to the Trust's entitlement to accrue these deductions at all. The Trust has deferred taking any sum in relation to these unavailability deductions ("Deferred Deductions").

If the Trust were to deduct the Deferred Deductions and/or to make further unavailability deductions in relation to the Doors, Project Co considers that it will be able to recover such deductions in full from the Contractor and/or its supply chain. However, depending on the quantum of the unavailability deductions and the timing of any recovery, project cashflows 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 deduct the Deferred Deductions and/or to make further unavailability deductions in respect of the Doors, and should it be found that the Trust was legally entitled to do so, the Trust would have grounds to terminate the Project Agreement because of the level of deductions incurred in the previous 12 months. Project Co and the Issuer are hopeful that matters will be resolved amongst the parties before it reaches this stage.

Project Co and the Issuer continue to take legal advice with respect to the matters mentioned in this announcement 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

19 October 2017

This information is provided by RNS

The company news service from the London Stock Exchange

END

CIRLIFITIFLALID

(END) Dow Jones Newswires

October 19, 2017 04:08 ET (08:08 GMT)

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