G4S unveils £600m fund-raising scheme to shore up balance sheet
Company still reeling from Olympics security failure and overcharging scandal for tagging offenders
Wednesday 28 August 2013
Ashley Almanza, the new chief executive of the security giant G4S, attempted to put its Olympic and electronic tagging woes behind it today by announcing plans to raise £550m through a share placing and sales of non-core businesses.
Mr Almanza, who launched a strategic review when he arrived at the start of June, said: "We need to strengthen our balance sheet to be able to realise the group's opportunity for substantial value creation. We plan to introduce systems and processes to improve efficiency and risk management and we will be restructuring a number of businesses to ensure that they are more competitive and able to deliver improved margins."
And, in what some analysts privately called a "kitchen sink job", Mr Almanza took massive writedowns on the value of businesses and contracts totalling £180m, which pushed the group into a first-half loss of £87m. Profit before interest, tax and amortisation was flat at £202m.
Last year G4S was hit by £80m of losses stemming from its inability to fulfil its Olympics security contract, and this year it was accused of overcharging for electronic tagging.
G4S placed 141 million new shares today at 247p a piece to raise £348m. Unusually for such placings the share price actually rose on the day, up 7.1p to 252.4p.
Mike Allen at Panmure Gordon welcomed Mr Almanza's debut announcement as chief executive. "We applaud the quick work undertaken by management to re-structure the group and shore up the balance sheet," the analyst.
G4S also announced the sale of a Colombian and Canadian business for a total of £100m, and plans to sell other businesses, including its US Government Solutions arm, for a further £250m.
Mr Almanza highlighted the fact that without the fundraising and sell-offs, G4S was in danger of having its credit rating downgraded. That, he said, could increase its borrowing costs by up to £30m a year.
"In the near term, 2013 will be a year of consolidation for the group with the actions we are now taking starting to deliver tangible benefits during 2014," he said.
- 1 iOS 8 apps and features: eight iPhone settings you need to look at after you install the update
- 2 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 3 'F*ck it, I quit': TV reporter Charlo Greene quits live on air in spectacular fashion
- 4 Scotland could still declare independence – even without referendum, says Alex Salmond
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Khorasan: Muhsin al-Fadhli - the man leading a terror group more feared by US officials than Isis
'F*ck it, I quit': TV reporter Charlo Greene quits live on air in spectacular fashion
Alicia Keys leaks nude photo 'to create a kinder and more peaceful world'
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...