58A.1  Assets destroyed

If all of the Assets are destroyed or substantially destroyed in a single event and the insurance proceeds (when taken together with any other funds available to the Contractor285) are equal to or greater than the amount required to repair or reinstate the Assets, the Contractor286 shall calculate287 the senior debt loan life cover ratio288 as used in the Base Case (on the assumption that the Assets are repaired or reinstated in accordance with clause 58.1 (Reinstatement and Change of Requirement after Insured Event).

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285  Such funds could, for example, include sums made available to the Contractor by the Authority to ensure that the test in clause 58A.2 is passed and that, as a result, reinstatement occurs in accordance with clause 58 (Reinstatement and Change of Requirement after Insured Event).

286  The calculation will be controlled by the Senior Lenders in the Financing Agreements, and checks will need to be made by the Authority that this calculation allows reinstatement.

287  There will be a debate as to how this should be done.  Since the Senior Lenders are those whose interests are being protected, the formulae set out in the banking financial model should be used, having agreed exactly how the formula will work and memorialised this in the Agreement (see footnote 285 above).

288  For the meaning of this ratio see section 5.2.3 (Calculation of Compensation) of SoPC.