Amey, the UK highway maintenance contractor is one of the assets being put up for sale by Spanish infrastructure group Ferrovial, according to a report in the Financial Times
The newspaper said Ferrovial has appointed external advisers "to explore the possibility of divesting part or all of the assets of the Services division that the company owns directly or indirectly", which includes Amey.
The Spanish firm acquired Amey in 2003 for £81mln, then went on to take over airports operator BAA for £10bn in 2016, and in 2013 it paid £385m to acquire Enterprise, which it merged with Amey to double its size.
Ferrovial posted a net loss of €72mln (£64mln) for the first half of 2018 because of €237mln (£210mln) allocated for losses on Amey’s highway maintenance contract with Birmingham City Council. Amey has also incurred a £48mln loss on the M8 motorway upgrade in Scotland.
According to the Financial Times, Goldman Sachs has been assigned to explore sale opportunities.
The move comes amid difficult times contractors in the wake of the collapse of Carillion PLC (LON:CLLN) at the start of the year under the weight of a £1.5bn debt pile after it failed to secure a rescue deal with lenders or the UK government.
Carillion had more than 190,000 employees, many working on government contracts to build schools, roads and hospitals, at the time of its collapse.
Kier cash call move shows construction sector woes
Kier’s management indicated that while the group’s financial position has not adversely impacted the order book to date, they believe that the external environment has changed recently - partly as a result of Brexit - with banks, suppliers, customers and bondsmen all wanting the firm to have lower leverage.
READ: Kier Group shares plunge as FTSE 250-listed firm taps shareholders for around £264mln via a rights issue
Haydn Mursell, Kier’s chief executive commented: "There has been a recent change in sentiment from the credit markets towards the UK construction sector, with various lenders indicating that they will be reducing their exposure to the sector. This has led to lower confidence among other stakeholders and an increased focus on balance sheet strength.
Analysts said this clearly has implications for the rest of the Construction sector.