First dual health PFI

City firm Lovells has acted on what is thought to be one of the first private finance initiative (PFI) deals in the healthcare sector to have reached financial close with a single firm representing both lender and sponsor.

A team headed by corporate finance partner Charles Robson acted for both the project vehicle, Albion Healthcare, and the senior lender, Dexia Bank, in a 35 million project for the Nuffield Orthopaedic Centre NHS Trust to refurbish and reconstruct parts of the existing Nuffield hospital.

Mr Robson said the deal structure was developed in response to the request of a client who realised the similarity in interests of lender and sponsor.

'There is a big advantage in terms of the procurement timetable,' he said.

'Usually a sponsor's law firm would negotiate a costing with the relevant authority and then send it through to the lender's solicitors for review, which will normally take time and further negotiations before an agreement is reached.

'Having a single firm acting for the private sector side cuts out a lot of tooing and froing and avoids duplication - it's an attractive option to all parties for cost and time purposes.'

Mr Robson said the firm is also able to get involved in establishing good relationships between sponsor and lender, which are the basis for PFI deals.

'By taking only commercial issues to the principals of both parties, you cut out a lot of posturing and antagonising that can sometimes occur,' he explained.

Eversheds acted for the trust.

Andrew Towler