Shareholders vote to dispose of property worth £25m as Ferrovial makes late bid for lucrative Tube Lines stake.
Jarvis was given a financial boost today (Thursday) when shareholders voted to dispose of property worth £25m at an extraordinary general meeting.
The cash-strapped contractor has debts of around £250m and failure to dispose of the property could have put the survival plans of chief executive Alan Lovell in jeopardy.
The EGM followed news that Spanish construction giant Ferrovial had emerged as a last-minute bidder for Jarvis’s stake in Tube Lines. The firm said that its UK subsidiary Amey was in talks with Jarvis about taking over the 33% stake, thought to be worth around £100m.
Jarvis confirmed that it was in talks with Ferrovial. Private Equity firm Star Capital is also considering a bid for the lucrative tube maintenance company, which recently announced full year profits of £50m.
Ferrovial’s move could be scuppered by Ken Livingston if he objects to the Spanish firm taking a 66% stake in Tube Lines. The third stakeholder in Tubelines, Bechtel, also has a right to veto any deal to sell the Jarvis stake.
Jarvis managed to raise more much needed cash yesterday when it sold its European Roads business for £24.5m. Somaro, a subsidiary of French engineering group Bouygues, has acquired the division and will assume the debts of around £4.0m
Lovell said that the sale represented “significant progress” towards reducing the debt and refocusing on three core businesses, namely rail, road and plant hire activities.