New chief for Invensys as full woes emerge

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Invensys, which unveiled a £2.7bn refinancing deal last week, is to hire a chief operating officer to strengthen its management as details emerge of how close the engineer came to financial meltdown.

Rick Haythornthwaite, the chief executive, has started the search for a COO who will help him impose stricter controls on the six operating businesses in the new Invensys.

Last week it dropped plans to sell its appliance controls and climate controls divisions.

In an interview with The Independent on Sunday, Mr Haythornthwaite admitted the company had been struggling to impose financial and operational controls. Sources close to the company said this, along with hiccups in its disposal programme, pushed it close to financial collapse.

It faced repaying a $500m (£273m) banking facility this year and £800m in 2005. "We could see a very large funding gap in 2005," said an insider. "Also, the pension trustees were becoming nervous." The Invensys pension fund revealed a £600m deficit late last year.

If Invensys had not gone for a refinancing now, there were worries it could have fallen into the hands of its bankers in a Marconi-style refinancing.

"I was threatened with the possibility of running the company for the banks," said Mr Haythornthwaite.