20 October 2004 LAWFUEL – Law, legal, attorney, law firm newsThe sale of 50% of the capital in the M40 motorway PFI project to the Secondary Market Infrastructure Fund (SMIF) proves the increasing importance of the secondary equity market for PFI/PPP deals in the UK, says Norton Rose partner Martin McCann.
The £170 million project was part of the Highways Agency’s first wave of design, build, finance and operate (DBFO) road projects. The original deal was signed by the UK Highways M40 Limited consortium, which included Laing, CDC, Carillion, Transroute International and Hyder Investments, in 1996. Construction was completed in 1999 and the project was refinanced in 2001.
“The importance of the liquidity of secondary equity to PFI/PPP market capacity has long been talked about but, until recently, there have only been occasional sales,” said Martin. “Now, with a consistent flow of projects finalising construction and commencing operation, we are receiving a lot of instructions for secondary equity disposals.”
Norton Rose advised SMIF, one of the leading players in the secondary equity market in the UK, on its acquisition of 50% of Laing’s interest in the M40. Projects partner Martin McCann led a combined PFI/PPP and corporate finance team including corporate finance partner Ian Fox and associate Anthony Riley and PFI/PPP team associates Oliver Carruthers and Nicky Davis. This is by no means the only deal on which Norton Rose’s leading PFI/PPP and corporate finance practices have collaborated; the firm is advising on a wide array of prospective secondary market transactions and anticipates that the area will continue to grow rapidly.
The vendors, Laing, were advised by CMS Cameron McKenna.
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