Pennon Group PLC Update on Viridor's Greater Manchester Contract (8373O)
August 24 2017 - 2:00AM
UK Regulatory
TIDMPNN
RNS Number : 8373O
Pennon Group PLC
24 August 2017
24 August 2017
PENNON GROUP PLC
Update on Viridor's Greater Manchester Contract
As previously reported, the Greater Manchester Waste Disposal
Authority (GMWDA) took the decision in April 2017 to seek an exit
from their 25-year Recycling & Waste Management Private Finance
Initiative (PFI) Contract with Viridor Laing (Greater Manchester)
Limited.
Viridor and its partners have been working with GMWDA to agree
the principles of an exit. These principles have now been agreed
and a heads of terms between GMWDA and Viridor Laing (Greater
Manchester) Limited has been signed.
Residual waste will continue to be treated at the Runcorn I
Energy Recovery Facility which Viridor will continue to operate for
the remainder of the original 25-year contract with no significant
operational changes.
GMWDA has indicated that the recycling and reprocessing
operations will be subject to a re-procurement process, commencing
later in 2017. In the meantime, expectations are that Viridor will
continue to provide these services for a period of not less than 18
months. Viridor will also be eligible to bid for the new
contract.
It is envisaged (subject to a number of conditions and
approvals) that a final agreement will be signed by the end of
September 2017, dealing with the termination of the PFI Contract.
Ownership of Viridor Laing (Greater Manchester) Limited will at
that time pass to GMWDA.
For the joint venture entities, Viridor Laing (Greater
Manchester) Holdings Limited and INEOS Runcorn (TPS) Holdings
Limited, Pennon anticipates at this stage a net one-off
non-material impact to the income statement in 2017/18. This takes
into account a reduction in the book value investment in joint
ventures and an expected one-off gain on joint venture profit after
tax. A fuller update will be provided in due course when all
agreements are finalised.
For further information, please contact:
Pennon: Susan Davy - Chief Financial Officer
Paul Boote - Group Financial Controller
01392 443 267
Finsbury: James Murgatroyd
Faeth Birch
0207 251 3801
Notes to Editors:
Viridor Laing (Greater Manchester) Limited is wholly owned by
Viridor Laing (Greater Manchester) Holdings Limited which in turn
is jointly owned by Viridor and John Laing.
INEOS Runcorn (TPS) Limited is wholly owned by INEOS Runcorn
(TPS) Holdings Limited which in turn is a joint venture between
Viridor, John Laing and Inovyn Chlorvinyls Limited.
The book value of Viridor's economic investment in the Greater
Manchester project as at 31 March 2017 was GBP78.0 million, of
which Viridor Laing (Greater Manchester) Holdings Limited
represents GBP40.2 million and INEOS Runcorn (TPS) Holdings Limited
represents GBP37.8 million.
Cautionary statement in respect of forward-looking
statements
Certain statements in this announcement are forward-looking
statements relating to the Group's operations, performance and
financial position based on current expectations of, and
assumptions and forecasts made by, management. They are subject to
a number of risks, uncertainties and other factors that could cause
actual results, performance or achievements of the Group to differ
materially from any outcomes or results expressed or implied by
such forward-looking statements. The Group's principal risks were
described in the 2017 Pennon Group Annual Report which can be
viewed online at www.pennon-group.co.uk/AR2017 Such forward looking
statements should therefore be construed in light of such risks,
uncertainties and other factors and undue reliance should not be
placed on them. They are made only as of the date of this
announcement and no representation, assurance, guarantee or
warranty is given in relation to them including as to their
accuracy, completeness, or the basis on which they are made. No
obligation is accepted to publicly revise or update these
forward-looking statements or adjust them as a result of new
information or for future events or developments, except to the
extent legally required. Nothing in this Statement should be
construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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