ANNOUNCEMENT

THE COVENTRY AND RUGBY HOSPITAL COMPANY PLC - RNS ANNOUNCEMENT

THE COVENTRY AND RUGBY HOSPITAL COMPANY PLC (the "Issuer")

£407,239,000

3.246 per cent. Index Linked guaranteed secured bonds due 30 June 2040 (including £35,000,000 variation bonds)

(with authority to issue further bonds)

unconditionally and irrevocably guaranteed as to scheduled payments of principal and interest pursuant to a financial guarantee policy

issued by MBIA ASSURANCE S.A. (succeeded by ASSURED GUARANTY UK LIMITED)

Referral to Adjudication concerning Adjusted Estimated Fair Value of the Agreement (AEFVA)

In reference to the Project Agreement between University Hospitals Coventry and Warwickshire National Health Service Trust, Coventry Primary Care Trust (succeeded by Coventry and Warwickshire Partnership Trust) and The Coventry and Rugby Hospital Company Plc, dated 3 December 2002, as amended from time to time and the Collateral Deed between The Coventry and Rugby Hospital Company Plc, The Coventry and Rugby Hospital Company (Holdings) Limited, Mourant & Co. Capital Trustees Limited (succeeded by Apex Corporate Trustees (UK) Ltd) (As Security Trustee and Bond Trustee) and MBIA Assurance S.A. (succeeded by Assured Guaranty UK Limited), dated 3 December 2002. Unless otherwise defined herein, capitalised terms have the same meaning as given to them in the Project Agreement, Schedules to the Project Agreement and Collateral Deed.

As reported in RNS numbers 7541O on 1 February 2023 the Issuer received a termination notice from the Coventry and Warwickshire Partnership Trust (previously Coventry Primary Care Trust) (the "Trust"). By this termination notice the Trust stated that it had terminated the Project Agreement in its entirety as it applies to the Trust only, pursuant to the terms of the Project Agreement, and that such termination took effect on 1 February 2023.

It was subsequently announced in RNS 9708S that the Trust did not elect to retender the Coventry Primary Care Trust Project Operations and therefore the no retendering procedure under the Project Agreement would be followed.  Consequently, the Issuer and the Trust would seek to agree the Estimated Fair Value of the Project Agreement (as it relates to the Trust only).

In RNS 7979W it was stated that in accordance with the principles set out in the Project Agreement and using all information available to it, the Issuer calculated the Estimated Fair Value of the Agreement as at 1 February 2023 to be £85,553,937.  This was communicated to the Trust on 3 March 2023.  The Estimated Fair Value of the Agreement will be subject to tax equalisation if the Issuer attracts a tax liability as a result of the payment, whereby the amount of compensation is increased to ensure the Issuer is in the same position as it would have been in had it not been for the relevant tax liability.  In addition, interest will be payable on the compensation payment in accordance with the terms of the Project Agreement.

The Trust responded on 18 April 2023, stating that in its assessment the Estimated Fair Value of the Agreement is negative £39,749,282.

Subsequent exchanges between the Issuer and the Trust in the intervening period have not resulted in agreement. 

On 30th January 2024 the Issuer served a Referral Notice to the Trust referring the Dispute regarding EFVA / AEFVA to adjudication.  The adjudication timetable has yet to be agreed.

Enquiries

The Issuer
The Coventry and Rugry Hospital Company Plc
8 White Oak Square
Swanley
Kent
BR8-7AG

Attention: Jacques Mostert, Project Co. Representative.

Important information

This announcement is not a prospectus, is distributed for information purposes only and does not constitute or form part of any offer or invitation to issue, acquire or dispose of any securities in any jurisdiction. Nothing in this document is intended to amount to an invitation or inducement to engage in investment activity. Nothing in this document amounts to the giving of advice. If you are in any doubt as to the action you should take, you should consult a professional adviser.