24 October 2017 | Herpreet Kaur Grewal
Carillion has signed heads of terms with Serco Group Plc for the disposal of a large part of its UK healthcare facilities management business for £50.1 million, subject to a limited working capital adjustment.
Carillion has agreed to give Serco a period of exclusivity to provide the parties with time to finalise a business purchase agreement, which Carillion and Serco aim to sign in the next few weeks, says a company update.
It adds that the "transfers of contracts pursuant to this disposal are each subject to receipt of third-party consents, and, if required, shareholder approval. It is intended for the contract transfers to take place on a phased basis, with the aim of receiving the bulk of the proceeds during the first half of 2018".
Further details will be published once the business purchase agreement is signed.
Carillion intends to dispose of the remaining contracts in its UK healthcare facilities management portfolio during 2018.
Serco said these contracts provide FM support services to more than 50 NHS sites across the UK, including five acute hospital trusts.
Serco added that "the portfolio of contracts is profitable and has current annual revenue of approximately £90m and a weighted average remaining term of 14 years".
Alongside this announcement, Carillion also published details of its refinancing strategy. It announced on 29 September 2017 that a term sheet for further committed credit facilities of £140m had been agreed with five of the group's core lenders. Further to this, the group announced the signing of two committed facilities, totalling £140 million, as contemplated by this term sheet and this additional liquidity is fully available to draw down now.