22 April 2003

This information is provided courtesy of Law-Now, CMS Cameron McKenna's free on-line information service.

www.law-now.com

The PFI secondary market - a natural progression?

Financial investors have been at the forefront of the
development of the PFI/PPP market. It was their
willingness to raise the funding and to invest time and
effort in bidding with contractors and operators for
the first PFI projects, in conjunction with contractors
and operators, which led to the creation of the market
itself.

However, as the UK PFI market matures and more
projects reach their operational phase, a secondary
market for private finance equity is gaining
momentum.

On completion of the construction phase the risk
profile of a project reduces which increases the value
of the original equity investment, and makes
divestment an attractive option for both financial
investors and commercial players actively managing
their investments. It has been estimated that 65% of
the 530 PFI projects signed to date have reached
construction completion and moved into the
operational phase, with many more projects being
forecast to complete over the next two years.

There is good reason to suggest that there will be
considerable movement within the equity ownership
of PFI projects in the near future and, in particular,
many see the sale of equity investments as a natural
progression of PFI.

To find out more about the PFI secondary market
please click on the link below to download a pdf
http://www.law-now.com/law-now/5333.pdf or
contact either Sandra Rafferty on +44 (0)20 7367 2804
or at sandra.rafferty@cmck.com or Jason Davies on
+44 (0)20 7367 2194 or at jason.davies@cmck.com