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Fulcrum, a leading UK multi-utility infrastructure and services provider, has today announced it will receive £5 million following completion of the latest part of the sale of its domestic customer gas connection assets and associated meters to E.S. Pipelines Ltd (ESP). It also confirmed that the value of the agreement has been enhanced by the company securing a number of contracts in the housing sector and, because of this, Fulcrum will receive £4.7 million in cash on 30 November 2020 with the remaining amount expected to be received on 31 May 2022.
This follows the first payment of £17.5 million received under the asset sale, which was agreed in December 2019, and further supports Fulcrum’s growth strategy to expand its operations in the design, installation and management of multi-utility connections in the domestic housing and Industrial & Commercial sectors.
The asset sale arrangement also provides Fulcrum with the opportunity to receive additional payments from ESP of up to £4 million, over the remaining term of the contract, if certain milestones are achieved for new domestic connections secured in the period to 31 March 2025.
The first milestone payment has been triggered by Fulcrum winning new utility connections projects for a series of housing developments across the country. As a result of achieving the first milestone, Fulcrum estimates the value of the asset sale will increase by approximately £1 million, to a total of £49 million.
Daren Harris, Fulcrum CEO, said: “I am very pleased to confirm the achievement of the first enhanced payment milestone, resulting from a strong series of new housing contract wins, and the amended arrangements with ESP which will provide certainty of the timing of cash inflows and thus enhance our cash planning.
“The asset sale has significantly strengthened Fulcrum’s balance sheet and aids our strategic growth ambitions, and the enhancement to payments will further support this. Our relationship with ESP also continues to progress strongly and is delivering improvements in Fulcrum’s capabilities across all segments of the market.”