Balfour Beatty to offload controversial hospital stake
Balfour Beatty, the UK's biggest listed construction company, is looking to sell its stake in one of the country's most infamous Private Finance Initiative schemes.
Chief executive Ian Tyler is gearing up to sell the group's one-third stake in University College Hospital off Tottenham Court Road in central London. The project was heavily criticised when costs soared from £120m to £430m, and it was cited by those who argued that PFI was privatisation by stealth and was doomed to economic failure.
Opened in 2005, Balfour Beatty has decided to cash in on the stake it still holds in the project, which was a redevelopment of a hospital first built in 1834. The company hopes to fetch £60m to £80m.
The parties that hold the other two-thirds, Semperian PPP Investment Partners and FTSE-250 support services group Interserve, are believed to have pre-emption rights. This would mean that they could end up with a 50:50 shareholding, though other major infrastructure funds are thought to be interested.
Construction companies typically took equity stakes in the PFI projects they built when the procurement method was all the rage under the Labour government.
However, they also looked to sell off those stakes within a few years as construction groups like to have plenty of cash on their balance sheet to underwrite projects. The industry often faces cost and time overruns that can lead to litigation and substantial losses, though Balfour Beatty is also quite acquisitive and could plough the cash into takeovers.
Balfour Beatty is mulling the sale at a tough point in its history. Last week the group put 12,000 of its UK construction services staff on redundancy alert.
Mr Tyler has previously stated the group hopes to make cost savings of £15m by 2015. Balfour Beatty is worth more than £1.9bn with a 285.5p share price.
A cautionary tale for ambitious would-be authors
X Factor judge will appear in court later this month
Sir Ian McKellen hits back at Damian Lewis' 'fruity' claims
Ja Rule forced to deny leaving wife for prison cell mate
Gurdwaras-turned-food banks: Sikh temples are catering for rise in Britain’s hungry
Teenage girl convicted of robbery after taking pre-crime selfie wielding knife
'I'm experiencing austerity as well', says Princess Michael of Kent
- 1 Gurdwaras-turned-food banks: Sikh temples are catering for rise in Britain’s hungry
- 2 Exercise most effective lifestyle choice for preventing dementia, researchers say
- 3 Teenage girl convicted of robbery after taking pre-crime selfie wielding knife
- 4 Newly vegan Beyoncé wears fox fur to dine in meat free restaurant
- 5 'I'm experiencing austerity as well', says Princess Michael of Kent
- < Previous
- Next >
iJobs Money & Business
£44000 - £55000 per annum + Excellent Benefits: Pro-Recruitment Group: Confide...
£25000 - £35000 per annum + Benefits : Harrington Starr: PHP Symfony2 Framewor...
£40000 - £55000 per annum + Bonus and Benefits: Harrington Starr: A leading pr...
£50000 - £60000 per annum + Bonus + Benefits: Harrington Starr: Market Data An...