Stage one of Jarvis's survival plan is reported to have taken place with sale of stake in Tubelines.

Alan Lovell’s plans to bring Jarvis back from the brink of financial collapse by selling the group’s stake in Tubelines, the private-sector consortium that manages part of the London Underground are reported to have come to fruition today.

The Daily Telegraph reports that the £100-million stake will be sold to private equity group Star Capital as soon as approval is granted by the other members of the consortium.

Tubelines has a contract worth more than £4 billion to maintain and repair one-third of the Underground network, and made a profit of £40 million last year. Selling Jarvis’ stake is the central plank of Lovell’s all-or-nothing rescue plan for the firm, and would allow it to extend its £250 million bank loan for another 12 months. Lovell is also looking for a strategic investor to step in and take over a 40% share of the beleaguered company.

As all eyes watch to see if Lovell can pull of the deal in the two weeks before Christmas. Barclays Bank and the Royal Bank of Scotland will be especially hopeful that he can produce the magic needed to turn the company around. The two banks, which are Jarvis’ main lenders, are determined to stop the infrastructure and construction company from going under with current net debts estimated at £240 million. If it did, they would be left facing an eight-figure bill to pay to clients and subcontractors involved with the firm.