Linklaters advises on the UK Military Flight Training System PPP

Linklaters has advised RBS as mandated lead arranger on the limited recourse debt financing for the UK Military Flight Training System (MFTS) PPP project. The project is expected to be worth up to £6 billion over the 25-year term.

Under the MFTS Project, a private sector consortium (Ascent, comprised of Lockheed Martin and VT Group) will replace and integrate a range of aircrew flying training schemes for the Royal Navy, Royal Air Force and Army into one cohesive programme involving live and synthetic training, encompassing the training needs of the entire flying element of the UK front-line.

The MFTS Project has a bespoke “integrator model” structure that allows for future incremental packages for training services to be procured under the umbrella of the framework project agreement during the term of the concession.

Acting for the senior lender on the first training package, our role involved shaping the contractual terms and risk allocation associated with the “integrator model” structure, with a view to making the contractual structural 'bankable' for both senior lenders to the first training package and senior lenders to future incremental training packages.

Linklaters' Global Head of Project Finance Bruce White, who led the deal, said:

"We are delighted to have advised RBS on this groundbreaking transaction, where for the first time the "integrator model" has been successfully adopted for PPP. Others will look to replicate this. This puts us at the front of developing the Defence PPP market, when added to our roles recently closing the £1bn Future Provision of Marine Services (FPMS) PFI Project and the £2.5bn Future Strategic Tanker Aircraft (FSTA) PFI Project."

Other key members of the Linklaters team included partner Stuart Rowson and associates Mark Cheney, Deborah Tan, Adam Cowan, Nick Mackee, Brendan Smith. Specialist advice was given by Catrina Smith (employment), Nicholas Laird (pensions), William Robinson (TMT), Aniki Porter (real estate) and Richard Holden and Mandip Sansoy (banking).