News: Balfour Beatty sells stake in Rotherham PFI schools project
Balfour Beatty, the global infrastructure services group, has sold its 50% interest in the £100m PFI project that saw construction projects at 15 schools in Rotherham.
The Private Finance Initiative (PFI) was used by the public sector to buy services from a consortium of construction companies with the private consortium raising the money to build new schools and hospitals from bank loans and through shareholders. The public authority then pays back the private consortium over the long term.
As part of Transform Schools (Rotherham), Balfour Beatty entered into an a 31 year contract in 2003 to design and build 15 schools in Rotherham and to provide hard and soft facilities management services to the sites.
With nine new secondary schools and six new primary schools, it was, at the time, the largest community schools initiative of its type. The construction phase was completed on time and on budget by September 2006.
Balfour Beatty had a 50% share in the project with stakeholder partners, Innisfree PFI Fund 2, holding the other 50%. Now Balfour Beatty has disposed of its 50% to Innisfree as it looks to generate additional cash from disposals to "reinvest in areas that align with the group's target geographies and market sectors."
The group has disposed of a number of PFI projects raising £58.5m, exceeding the directors' valuation by £21.9m.
Andrew McNaughton, chief executive of Balfour Beatty, said: "Balfour Beatty's ability to deliver long-term projects has enabled us to deliver superior returns from our equity investments while delivering a first class service to the public sector.
"The transactions we have completed demonstrate the quality and liquidity of our portfolio and are in line with our strategy to generate income from our Infrastructure Investments business through disposals, thereby releasing cash for future investments and delivering value for our shareholders."
Balfour Beatty website
Images: Balfour Beatty
The Private Finance Initiative (PFI) was used by the public sector to buy services from a consortium of construction companies with the private consortium raising the money to build new schools and hospitals from bank loans and through shareholders. The public authority then pays back the private consortium over the long term.
As part of Transform Schools (Rotherham), Balfour Beatty entered into an a 31 year contract in 2003 to design and build 15 schools in Rotherham and to provide hard and soft facilities management services to the sites.
With nine new secondary schools and six new primary schools, it was, at the time, the largest community schools initiative of its type. The construction phase was completed on time and on budget by September 2006.
Balfour Beatty had a 50% share in the project with stakeholder partners, Innisfree PFI Fund 2, holding the other 50%. Now Balfour Beatty has disposed of its 50% to Innisfree as it looks to generate additional cash from disposals to "reinvest in areas that align with the group's target geographies and market sectors."
The group has disposed of a number of PFI projects raising £58.5m, exceeding the directors' valuation by £21.9m.
Andrew McNaughton, chief executive of Balfour Beatty, said: "Balfour Beatty's ability to deliver long-term projects has enabled us to deliver superior returns from our equity investments while delivering a first class service to the public sector.
"The transactions we have completed demonstrate the quality and liquidity of our portfolio and are in line with our strategy to generate income from our Infrastructure Investments business through disposals, thereby releasing cash for future investments and delivering value for our shareholders."
Balfour Beatty website
Images: Balfour Beatty
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