51VZ Cov&rug 3.246%

TIDM51VZ

RNS Number : 3845F

Coventry & Rugby Hospital Co PLC

11 November 2015

ANNOUNCEMENT

THE COVENTRY AND RUGBY HOSPITAL COMPANY PLC - RNS ANNOUNCEMENT

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

GBP407,239,000

3.246 per cent. Index Linked guaranteed secured bonds due 30 June 2040

(including GBP35,000,000 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 MBIA UK Insurance Limited)

Receipt of Payment Deduction Notice

On 06 November 2015, the Coventry and Warwickshire Partnership Trust (the "Trust") withheld GBP1,326,503.91 + VAT, from the service payment of GBP1,362,359.13 +VAT, which was due for payment to the Issuer on 06 November 2015.

The Trust has asserted that the amount withheld was determined on the basis that the whole of the Trust's site was unavailable from 30(th) September 2015 for the purposes of the applicable contractual documentation. The Trust has further asserted that the amount withheld takes into account the fact that the site continued to be used by the Trust during the period from this date. The Trust's assertion that the site was unavailable during the relevant period is based on certain alleged issues which have been identified as a result of surveys which have been undertaken at the Trust's Caludon Centre on the University Hospital Coventry and Warwickshire site on behalf of the Issuer in respect of the Centre's fire compartmentation, in addition to a number of electrical failures resulting from the failure of a switchgear panel. The Trust alleges that these findings result in a breach of the safety condition of the Hospital. The Issuer does not accept that the site was unavailable during the relevant period, and does not accept that there has been a breach of the safety condition, but is investigating these alleged issues, with the support of its subcontractors and fire experts, as a matter of urgency. The Issuer has received a report from their Fire Safety Experts, Tenos, confirming that no breach of the safety condition has arisen. This finding has been corroborated by QC opinion. Therefore the Issuer has given notice to the Trust that it intends initiate the Dispute Resolution Procedure.

The Issuer is taking legal advice with respect to the matters mentioned in this announcement and in light of evidence supporting that no breach of the safety condition has occurred intends to give notice to the Trust that it intends to initiate the Dispute Resolution provisions under the Project Agreement. A further update on these discussions will be made in due course.

In the meantime, however, holders of the Bonds should be aware of the circumstances which led to the Trust withholding part of the service payment which was due for payment in November and the risk that the Trust may withhold further amounts from future service payments.

In order to service its debt obligations under the Bonds, the Issuer is able, subject to certain conditions being satisfied, to utilise cash standing to the credit of one or more of the reserve bank accounts created for that purpose under the applicable contractual documentation.

Enquiries

The Issuer

The Coventry and Rugby Hospital Company Plc

8 White Oak Square

Swanley

Kent

BR8 7AG

Attention: Geoff Dix, 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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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(END) Dow Jones Newswires

November 11, 2015 09:27 ET (14:27 GMT)

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