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Balfour Beatty agrees to sell interests in two UK PPP concessions

4 March 2010

Transactions demonstrate the quality of Balfour Beatty's PPP investments and its ability to generate value for shareholders

Balfour Beatty, the international infrastructure group, announces that it has agreed the sale of a 23.9% interest in the Edinburgh Royal Infirmary PPP concession and of its entire 50% interest in the Aberdeen Waste Water PPP concession, both to funds managed by AMP Capital Investors Limited, the Australian wealth management company, for an aggregate consideration of £24.3 million. The transactions will generate a profit of c. £21 million.

Balfour Beatty will retain a 50% shareholding in the Edinburgh Royal Infirmary PPP concession following the transactions.

The interests to be sold were valued at £21 million in the Directors' valuation of PPP concessions as at 31 December 2009. The aggregate disposal proceeds of £24.3 million equate to a pre shareholder tax discount rate of less than 7% on the Directors' valuation cashflows.

The transactions remain subject only to the right of the Group's co-shareholders in the concessions to exercise pre-emption at the relevant sale price. Completion of the sale of these interests is expected to occur in April 2010.

Commenting today, Balfour Beatty Chief Executive, Ian Tyler, said:

"These transactions demonstrate the quality of our PPP assets and fully justify our commitment to developing and maintaining an active PPP investment portfolio. Balfour Beatty's development capability, operating expertise and proven capability in financial structuring allow us to form long-term partnerships with the public sector and to realise superior returns from our equity investments. These transactions represent excellent value for Balfour Beatty shareholders."

Analyst/media enquiries:

Duncan Murray
Balfour Beatty plc
Tel 020 7216 6865

www.balfourbeatty.com

Notes to Editors:

  1. AMP is effecting the acquisition through its European infrastructure fund, AMP Capital Investors (European Infrastructure No. 4) S.à.r.l.

  2. Balfour Beatty has a substantial infrastructure investments portfolio, largely through the UK PPP/PFI programme. This portfolio consists of:

    1. Nine major hospitals
    2. Ten major schools schemes in the UK and a technical education centre in Singapore
    3. Six roads schemes and three street lighting projects, in addition to Coventry at preferred bidder stage
    4. The London Underground power system
    5. A waste water scheme
    6. A coastal defence pathfinder PPP
    7. Barking Power Station (non-PPP)
    8. Exeter International Airport (non-PPP)
    9. Blackpool International Airport (non-PPP)

    In the US, Balfour Beatty is responsible for the development, renovation, operation and management of military privatisation housing projects for the US Departments of the Army, Navy and Air Force. Balfour Beatty is a leader in the military housing industry and provides services to members of the US military and their families residing on or near bases located in 20 states and Washington, DC.

  3. Balfour Beatty is a world-class infrastructure group operating in professional services, construction services, support services and infrastructure investments.

    We work in partnership with our customers principally in the UK, the US, South-East Asia and the Middle East, who value the highest levels of quality, safety and technical expertise.

    Our key infrastructure markets include transportation (roads, rail and airports); social infrastructure (education, specialist healthcare, and various types of accommodation); utilities (water, gas and power transmission and generation) and commercial (offices, leisure and retail). We deliver services essential to the development, creation and care of these infrastructure assets including investment, project design, financing and management, engineering and construction, and facilities management services.

    Balfour Beatty employs more than 50,000 people around the world.

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