John Laing unveils plan to fund PFI/PPP projects

John Laing is planning to raise an extra £100m through a Rights Issue to fund the infrastructure group’s rapidly growing number of PFI/PPP projects.

The deal offers shareholders the chance to buy new shares at 200p which represents an 18% discount to the price on the Stock Exchange.

Laing’s PFI equity portfolio is currently valued at £300m. Laing bids for projects in three specific marketplaces: in the accommodation sector, operating in the Equion consortium (portfolio worth £150m); Laing Roads (£80m); and Laing Rail (£70m).

The likely future investment that faces Laing in relation to bids now at preferred bidder stage and those on which it has been short-listed, amounts to £170m, with Laing assuming 40% of its short-listings will be won.

The group currently has a portfolio of 46 PFI/PPP projects. These are the result of successful project origination along with the acquisition and integration of portfolios bought from Hyder in 2001 and from Amey, two years later.

In June 2004, Laing and the Commonwealth Bank of Australia signed up to an agreement to co-invest in, and share bid costs relating to future UK hospital and European road projects. The intention is to invest up to £300m of project equity over 3-5 years.