Carillion reduces stakes in PPP projects

7th Dec 2009 07:31

Support services and construction firm Carillion has cashed in some of its chips on two public/private partnership (PPP) projects.The company has sold 65% of its 50% stake in the Allgeby Connaught project and half of its 40% equity interest in the Cheltenham New Accommodation Project for £86.9m to Innisfree, the infrastructure investment group.Carillion said it now expects to be net cash positive by the year end.The combined balance sheet value of the PPP assets was £76.7m, as at the end of 2008, while the total combined pre-tax profit attributable to these assets was £7.5m in 2008.The sale proceeds reflect the net present value of the cash flows derived from the £2.6bn of gross sales revenue that these equity investments would have generated for Carillion over the period of the concession contracts, the company said.The firm added that the disposals were in line with its policy of recycling equity in its investments in PPP projects. The funds raised will be used to reduce net borrowings.