Business
Pennon Peninsula MB Unwind
Pennon Peninsula MB Unwind.
About this update from Pennon Group Plc
[{"type":"text","content":"\n \nRNS Number : 4224W Pennon Group PLC 09 February 2017 \n\n9 February 2017\n \nPENNON GROUP PLC\n \n2011 Peninsula MB derivative unwind following agreement with Nomura\n \nPennon Group Plc (\"Pennon\" or the \"Group\") today announces that it has agreed terms with Nomura to unwind a derivative, entered into in 2011, through Peninsula MB Ltd. The derivative had been due to end in 2027, however, following a change in the economic benefit of this derivative outlined in the half year results 2016/17, Pennon is exercising its option to unwind the transaction early.\n \nThe process for unwinding the derivative means that Pennon is acquiring a financial asset with a value of £283 million and a financial liability with a value of £239 million from Nomura Structured Holdings plc. The counter-party to both these transactions is Peninsula MB Ltd. \n \nSimultaneously, Pennon will also acquire the remaining 25% of Peninsula MB Ltd's share capital from Nomura Structured Holdings plc with all Peninsula MB Ltd's liabilities now due to Pennon. Pennon is settling these liabilities through inter-company transactions with Peninsula MB Ltd. It is Pennon's intention to cease any future operating activities of Peninsula MB Ltd at this point and liquidate the company in due course. \n \nThe net consideration due to Nomura Structured Holdings plc in respect of these transactions is £44 million with an agreed payment date of June 2018. The impact for Pennon is expected to be a net cost of £35 million post-tax. The estimated overall post-tax impact of these transactions has already been reflected through the £39.5 million derivative liability recognised in the half year results 2016/17.\n \nPeninsula MB Ltd \n \nPeninsula MB Ltd is a private limited company, incorporated in England and Wales on 5 December 2011 as a subsidiary of Nomura Structured Holdings plc, part of the \"Nomura Group\". Prior to the transaction announced today, Peninsula MB Ltd's share capital was 75%-owned by Pennon and 25%-owned by Nomura Structured Holdings Plc, who had control of the company for accounting purposes. The principal activity of Peninsula MB Ltd was raising funds through the issuance of debt instruments and third party lending. As of the date of this announcement, Peninsula MB Ltd's only debt instruments and third party ...