PARTNERSHIPS UK SET TO BECOME A PUBLIC PRIVATE PARTNERSHIP (PPP)
27/02/2001
27 February 2001 PARTNERSHIPS UK SET TO BECOME A PUBLIC PRIVATE PARTNERSHIP (PPP)
Partnerships UK is set to become a public private partnership (PPP) in its own right following the Treasury's decision to seek private investors for a 51 per cent stake in the Government owned company, James Stewart, Chief Executive of Partnerships UK announced today.
Partnerships UK is expected to have a capital base of £45 million. The proposed sale by the Treasury involves an offer for sale of securities to the private sector, who are invited to acquire 51 per cent of Partnerships UK, with the remaining 49 per cent being retained by the public sector
Speaking about the plans, Derek Higgs, Non-Executive
Chairman of Partnerships UK said:
"This move marks a major stepping stone in Partnerships UK's business plan. Having access to new capital will accelerate the fulfillment of PUK's public sector mission in driving forward successful PPPs.
"The initial response has shown that interest in investing in Partnerships UK has been high and we look forward to working with our public and private shareholders to make the business a success."
James Stewart, Chief Executive of Partnerships UK said
"Partnerships UK is already fully operational and working on a wide range of PPP projects. The move to a PPP and the raising of capital will be the springboard to develop the business further.
"We are confident that we can drive forward the Government's ambitions to see effective public private partnerships. Partnerships UK will strive to be at the forefront of the development and implementation of better faster and stronger PPP transactions, helping to deliver value for money public services and efficient utilisation of public sector assets."
Andrew Smith, Chief Secretary to the Treasury said:
"The opening up of the market in this way is a significant development in what is becoming an increasingly mature market place.
"By turning Partnerships UK into a public private partnership the government is creating a key market opening for the private sector shareholders, keen to seize the opportunity to help the public sector deliver modern, high quality public services.
"Partnerships between the public and private sectors are the cornerstone of the government's modernisation programme. With Partnerships UK already pioneering a business model in a strong private sector market they are well positioned to play a pivotal role in developing and expanding the PPP market and to bring private sector disciplines to bear on public sector procurement."
The private sector is being invited to bid for ordinary shares in and convertible unsecured loan stock (CULS) of Partnerships UK plc to be held by the Treasury. A shortlist of respondents to the advert will receive further information on Partnerships UK to enable them to learn more about its business and further details of the Offer. These potential investors will be invited to invest between £1million and £5million .
Completion of the Offer is expected to take place by the end of March. The Offer - a private placement sale limited to certain qualifying investors - involves a proposed sale by the Treasury of 5,100,000 "A" Units in Partnerships UK plc. . The Treasury will hold 4,900,000 "B" Units.
As a public private partnership itself, Partnerships UK will aim to achieve a rate of return for its investors which is commensurate with the risks of its activities.
As the successor to the Treasury Taskforce, it will continue to assist the Treasury, the Office of Government Commerce and other parts of the public sector. By way of illustration, Partnerships UK has signed an agreement with the Treasury to provide support services. It will work with the Government in the development of PPP policy and contract standardisation and will provide a trouble shooting role on PPP projects. It will also continue to work closely with 4Ps on local authority projects.
It is expected that by 31 March 2002 Partnerships UK will be working on approximately twenty Development Partnerships.
NOTES TO EDITORS
1. Partnerships UK was launched in June 2000 to build upon the success of the Treasury Taskforce and to provide a permanent and sustainable centre of expertise to continue the Treasury Taskforce's role in developing and expanding the government's PPP programme. It aims to help develop and implement better and more efficient PPPs, including Wider Market projects. It will do this by working with public bodies on specific PPP transactions, aiming to improve the process of planning, negotiating and completing PPPs.
2. Wider Markets projects are PPP transactions entered into pursuant to the Government's Wider Markets Intiative, which aims to exploit the surplus or latest potential of public sector assets (including physical assets, know-how and intellectual property), as the concept is discussed in the HM Treasury publication "Public Private Partnerships: The Governments Approach".
3. PUK has been established with a defined public sector mission. "To assist government (whether local, municipal, regional, national, developed, supreme, state, federal or otherwise, and whether of the United Kingdom or elsewhere) and other public bodies in the United Kingdom and elsewhere in the development, procurement, financing, implementation and management of private finance and public private partnerships projects (being projects and undertakings the resources from which are provided partly by public bodies and partly by private persons) by entering into joint ventures, by participating in public private partnership projects with private persons or acting as an investor, financier, consultant or otherwise; and to promote the development and use of public private partnerships generally.
4. Development Partnerships apply to Private Finance Initiative projects and to more innovative public private partnerships such as Wider Markets initiatives and joint ventures between the public and private sectors. Typically, Partnerships UK and the public body will jointly invest their skills, experience and financial resources to create better value from PPPs for the public sector. Partnerships UK's return will reflect the success of the project; but it will also be exposed to the costs and risks of failure.
5. Partnerships UK plc has absorbed the activities and project staff of the Treasury Taskforce. Responsibility for the Government's PFI policy has been transferred to the Office of Government Commerce.
6. The proposed sale by the Treasury involves an offer for sale of securities to the private sector, who are invited to acquire 51 per cent of Partnerships UK, with the remaining 49 per cent being retained by the public sector (of which it is intended that 44.6 per cent will be owned by the Treasury and 4.4 per cent will be owned by the Scottish Ministers.)
7. An advert for the proposed offer appeared in the Financial Times on Wednesday 21 February 2001.
8. Copies of the Information Memorandum are being made available to those qualifying institutions, being corporate bodies whose ordinary activities involve them in acquiring, holding, managing or disposing of investments as principal or agent for the purpose of the business and who satisfy a net assets test. The offer is not open to the public.
9. Each "A" Unit comprises one "A" Ordinary Share of £1 and £3.50 of CULS and each "B" Unit comprises one "B" Ordinary Share of £1 and £3.50 of CULS.
10. The expected capital base of £45 million is intended to be comprised of £10 million of ordinary share capital and £35 million of CULS.
11. N M Rothschild & Sons Limited is acting as Placement Agent for and financial adviser to HM Treasury in connection with the offer for sale by HM Treasury to Qualifying Institutions of 5,100,000 "A" Units in Partnerships UK plc.
12. UBS Warburg Ltd. is acting as financial adviser to Partnerships UK plc.
13. Enquiries on the placement should be made to James Vaux or Christopher Blunt at N M Rothschild & Sons Limited on 020 7280 5000 or fax 020 7280 5002.
14. For more information please access Partnerships UK's website on www.partnershipsuk.org.uk.
15. Press Enquiries to Malcolm Graves at Partnerships UK on 07785 316773.
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