Financial statements
NOTES TO THE FINANCIAL STATEMENTS
33. Minority interests
On 26 March the ultimate parent company, Pennon Group Plc acquired a 5% interest in Viridor Waste Management Limited (a wholly owned subsidiary) from the Group for £50m by way of a Forward Sale Agreement (FSA). The Group will reduce its parent loans by a corresponding amount over 5 years, commencing 26 March 2011.
The fair value of the cash flows arising from this transaction is £42m, which the Group has used in these financial statements after applying a discount rate of 6% to the transaction.
The Group has recognised the profit arising on the sale of the minority stake in Viridor Waste Management Limited in equity as permitted under the provisions of IAS 27 "Consolidated and separate financial statements".
The resulting transactions are recognised in these financial statements:
|
£m |
|
|
Fair value of proceeds |
42.0 |
|
Derecognition of share of goodwill in subsidiary (note 14) |
(12.3) |
|
Profit arising on disposal of shares taken direct to equity (note 32) |
(27.4) |
|
Minority interest at 31 March 2010 |
2.3 |
The earnings of the subsidiary were not material in the period following the subscription therefore no minority interest arises in the Consolidated Income Statement.