£3.4m windfall will go towards paying down the consultant’s debts
Troubled consultant Mouchel has sold its rail business to project manager Sinclair Knight Merz (SKM) for £3.4m cash.
Mouchel said the proceeds of the sale will go towards paying down the firm’s £87m debt mountain.
Shares in the firm have dived in recent weeks, as the consultant admitted to an £8m actuarial error, delayed its accounts and said it is likely to breach its banking covenants.
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Mouchel Rail boss Simon Collins will continue to head up the business at SKM. The deal is set to be complete on the 31st October.
The division reported a post-exception pre-tax profit of £0.8m on turnover of £13.6m for the year ending 31st July 2010.
Grant Rumbles, chief executive of Mouchel, said: “The sale of Mouchel Rail is a key step in our strategy to focus on Mouchel’s leading positions in core markets. We wish the rail business and its employees every success for the future.”
Mouchel said it had committed to fund certain work in respect of future project commitments under one contract up to a maximum of £750,000, which it expects will be recoverable.