Insurers grant Carillion JV extra time to prevent payment default

A company providing accommodation for armed forces personnel, which was impacted by the liquidation of Carillion, has been granted extra time by insurers to ensure it does not default on payments.

Aspire Defence Finance is responsible for Project Allenby/Connaught (PAC), which delivers new and improved accommodation for soldiers living and working across Salisbury Plain and at Aldershot.

It is also responsible for the construction of the Army Basing Programme (ABP) Works.

Aspire Defence Capital Works, Aspire Defence Services and Aspire Defence Services are all joint ventures between Carillion and KBR.

The insolvency of Carillion triggered certain contractual arrangements that ringfenced the joint ventures from the Wolverhampton-based group. These were designed to ensure PAC and the ABP works continued.

To fund the PAC project, Aspire had issued bonds which were underwritten by insurers Ambac Assurance UK and Assured Guaranty (UK).

However, Carillion’s liquidation in January raised concerns about a possible default on the bond payments.

In a statement today, Aspire said: “The liquidation of Carillion has caused a potential event of default. The company has submitted remedial plans to the insurers of the bonds.

“The remedial plans have the support of the insurers in-principle, and they are being put into effect.

“The (PAC) project’s financing documents specify a 60-day period for the remedial plans to be implemented. Whilst good progress has been made to remedy the situation the revised arrangements are not complete.”

It said the company had requested the deadline be extended and the insurers had agreed.

The new deadline has been set as April 30, 2018.

Aspire said it would continue to provide updates as appropriate.