Amec announced major restructuring plans this morning in a bid to tackle high debt levels and underperforming units.
In a stock market announcement the UK-based developer, engineering, design and energy services company said it was planning to sell pipeline business Amec Spie to boost its balance sheet.
It also said it would pull out of a number of construction businesses in the US and the UK, booking a largely non-cash post-tax exceptional charge of around £70m in 2005 as a result.
It is also considering splitting into two separate businesses, one focused on energy and process industries, the other on UK infrastructure.
Amec, which was the focus of renewed takeover speculation yesterday, has built up a large debt from a flurry of recent acquisitions, most notably the pipeline business of France’s Spie and other energy related businesses.
Net debt stood at £344.4m in 30 June.
Amec chief executive Peter Mason said he expected the sale of Spie to generate “significantly more” than the book value of the business, which stood at £280m on 30 June.
The proceeds will go to boosting the company’s balance sheet, facilitating the appropriate capital structures required for restructuring the rest of the business, he added.
Amec expects to be able to announce further details on the splitting of its remaining businesses within a couple of months.
In the UK AMEC is involved in a range of major developments and is bidding to be construction project manager of the 2012 Olympic Village.
References: EGi News 24/11/05
