LONDON: John Laing Group plc has completed the first stage of the transaction announced on 18 September 2020 to divest its 30% interest in Intercity Express Programme Phase 2 (IEP East), a news release said.
This first stage, consisting of a sale of the Group’s 15% interest in IEP East, completed yesterday. Cash proceeds from this stage of the transaction are £204.3 million, which includes £0.9 million of interest.
Completion of the sale of the Group’s remaining 15% interest will take place up to 12 months later at John Laing’s election, and will generate additional consideration of £203.4 million plus interest, calculated at a rate of 7% per annum, earned in the period between 2 October 2020 and completion of the second stage of the transaction. The consideration for the second stage of the transaction could therefore be up to £218.5 million.
Shareholders participate in the success of realisations through the special dividend, with the Group paying out approximately 5-10% of gross proceeds received from the sale of investments on an annual basis.
To date in 2020, we have announced the sale of 12 investments for gross proceeds of approximately £448 million (excluding the second stage of the IEP East transaction), of which £292 million of proceeds have been received.
After adjusting for £62 million of proceeds from two disposals (Buckthorn wind farm and Auckland South Corrections Facility) included in the 2019 special dividend calculation, proceeds received to date and eligible to be included in the 2020 special dividend calculation are £230 million, as at the date of this announcement.
Together with existing cash balances, the proceeds from this first stage of the divestment of IEP East will be used to repay cash borrowings drawn on our revolving credit facilities. Currently, the Group has available financial resources of approximately £490 million, including undrawn amounts on the credit facilities, available to fund future investment opportunities.