- The contract provided for Amey, the group’s British subsidiary, to take over the works until 2035
- The first payment will be for 160 million pounds this year
Amey, the infrastructure support provider and subsidiary of the Ferrovial group, will pay 215 million pounds (about 239.7 million euros) to the Birmingham City Council for terminate the contract they had regarding the rehabilitation, maintenance and replacement of certain infrastructures from the city.
In a relevant event sent this Saturday to the National Securities Market Commission (CNMV), Ferrovial explained that the agreement reached with the Birminghan consistory implies the Amey’s payment of those 215 million pounds (239.7 million euros), of which 160 million pounds (178.5 million euros) will be paid this year, and the remaining 55 million pounds (61.3 million euros) over the next six years.
The agreement between the two parties ends the contract that Amey signed in 2010 with Birmingham City Council to the improvement of the roads of the English city until 2035, and that has been a source of disputes between both parties and losses for the company.
“Amey will continue to provide services on a provisional basis until September 30, 2019, and that term may be extended until March 31, 2020”, added the company, which has ensured that the aforementioned agreement has no impact in Ferrovial’s profit and loss account.
The achievement of this agreement facilitates the group chaired by Rafael del Pino the sale of its Services division, which has the bulk of its activity in the United Kingdom. In fact, the dispute with Birmingham had led the company to raise the possibility of negotiating the sale of Amey separately from the rest of the business, as the group’s economic-financial director, Ernesto López-Mozo, indicated on the occasion of the recent presentation of quarterly results.
Ferrovial made a provision of 236 million euros a year ago now to cover the possible contrary court rulings arising from the judicial process towards which their discrepancies with the Birmingham City Council were resolved. Ferrovial then decided to raise the dispute to the Supreme Court after losing the last trial before the Appeal Court, although the appeal was rejected in July 2018.