Invensys metering arm disposal disappoints

The debt-laden engineer Invensys has made the first major sale in its latest disposals programme with a deal that will cut borrowings by a quarter.

However, the $650m (£389m) raised from the sale of the North Carolina-based metering service disappointed investors, whose expectations had been raised by earlier more successful sales, and the shares fell back 1.75p to 30.5p.

The buyer is IMS Meters, a company backed by the New York private equity investor Jordan. Since there was only one serious taker, Invensys had limited bargaining power.

Invensys embarked on a programme of disposals 18 months ago after its debt ballooned above £3bn. The first round of sales, designed to bring in £1.5bn, raised £1.8bn.

Invensys had debts of £1.56bn at its year end in March and the figure is little changed since then although a second round of disposals that began in April has already seen three companies sold.

Baan, the loss-making Dutch software group that has been the major cause of the problems at Invensys, was sold for $135m. The loss-making US electronics company Teccor was sold for $44m. The metering business last year had operating profits of £44m.