Kier sells Oldham PFI in £9m deal

Kier Group has announced it has completed the sale of its 50% interest in the Oldham schools private finance initiative project.

The construction company said the sale also included its 50% interest in a Norwich schools PFI project.

The firm announced in a statement on Monday that on 20 May this year it had sold the interests to a joint venture between an HICL infrastructure company and Kajima Partnerships for an "aggregate consideration of £9.2m".

Kier said: "The consideration was paid in cash in full on completion. The sales are in line with Kier's policy of selectively realising the value of the equity in its PFI portfolio.

"Kier constructed the schools and has also provided the schools with facilities management services for a number of years. Following the disposals, Kier will continue to provide the facilities services under the current contracts for a further 21 years in the case of the Norwich schools, and 22 years in the case of the Oldham schools.

"The aggregate consideration gives rise to a profit of £4.3m which will be disclosed in Kier's full year results for the year ending 30 June 2011 and represents a valuation discount rate on the base case cash flows of approximately 7%."

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