Balfour Beatty offloads another chunk of M25 firm
The firm said it has an unconditional right to sell the stake to funds managed by Dalmore Capital.
Balfour Beatty is to bank £62 million by selling an additional 7.5% stake in Connect Plus, the company which operates and maintains the M25 motorway.
The firm said it has an unconditional right to sell the stake to funds managed by Dalmore Capital, but added that Equitix Investment Management has a priority right to buy the stake before March 13.
Dalmore Capital has already forked out £103 million for a 12.5% holding in Connect Plus.
Balfour’s profit from the latest transaction is expected to come in at £32 million and the proceeds will be used to pay down debt.
Balfour said that as a result of the stake sales, its expectations for both group profit before tax and year end net cash in 2017 are above previous guidance.
Balfour is expecting to book £85 million in infrastructure investments profit on the disposals and year-end net cash, originally forecast to be in line with the previous year, is forecast to come in £103 million higher.
The group will continue to hold a 20% stake in Connect Plus following the deal.
In August, Balfour saw pre-tax profit reach £12 million, which compared to a £15 million loss in the same period a year earlier.
The results came as welcome relief to the firm after it was held back by onerous construction contracts that delivered poor returns in 2016.
Group revenue increased over 6% to £3.5 billion, despite the firm’s order book falling 4.2% to £11.4 billion, though Balfour put it down to a “disciplined and selective approach to bidding”.