Invensys to hand back pounds 1bn to investors
Thursday 03 June 1999
The move followed confirmation yesterday that the group is to dispose of units totalling a quarter of group sales and cut another 5,000 jobs worldwide.
The job losses, including 700 in the UK, follow the loss of 6,000 as part of a restructuring programme. Yesterday the group said the final cost savings from the merger would be 20 per cent higher than expected at pounds 300m.
The return of capital to shareholders depends on the success of the disposal programme. which is expected to yield pounds 1.8bn.
Allen Yurko, chief executive, declined to reveal a timetable for the handout, but said the bulk of the disposals should be completed within 10 months.
Invensys could opt to return the cash either through a special dividend or a share buyback. It is to seek permission from its shareholders at its annual meeting to raise the proportion of share capital it can purchase in the market from 5 to 10 per cent.
The group is to sell its automotive, paper technology and environmental businesses, and about 12 other small companies.
These activities last year generated sales of pounds 2.43bn, 26 per cent of the group total, and operating profits of pounds 202m. The company said discussions with potential buyers had started.
The group also proposes to take a listing on the New York stock exchange. Thirty-five per cent of its shares are US-owned and 48 per cent of ongoing revenues come from North America. It said it had no plans to re-locate to the US.
The company unveiled maiden annual results for the new group showing sales down from 11.6bn to 9.41bn. Pre-tax profits fell from pounds 1.58bn to pounds 295 after exceptional items and goodwill, including restructuring charges of pounds 306m and losses on disposals of pounds 412m.
Investment, page 23
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