Mouchel sells rail arm to rival consultant

Aaron Morby 10 years ago

Debt-laden consultant Mouchel is to sell its rail business to rival Sinclair Knight Merz.

The firm will receive £3.4m in cash, while Mouchel will retain debtors and work in progress, worth an estimated £2.5m.

Under the complex deal, SKM will assist Mouchel in the collection of Mouchel Rail’s trade debtors and work-in-progress, and will receive 5% of all cash recovered as a fee.

Mouchel has also agreed to fund future project commitments on one contract worth up to £750,000, but said it expected this to be recovered when the contract completes.

Grant Rumbles, Chief Executive Officer of Mouchel, said: “The sale of Mouchel Rail is a key step in our strategy to focus on Mouchel’s leading positions in core markets. We wish the rail business and its employees every success for the future.”

Mouchel Rail is led and managed by Simon Collins, the Rail Business Unit Director, who will remain with Mouchel Rail under SKM’s ownership.

All proceeds from the sale will be used to repay a portion of Mouchel’s £87m debt. Mouchel is currently locked in talks with lenders to avoid a breach of banking covenants.

The firm’s lending banks expect a first £30m tranche of debt payments in March.

Last year Mouchel Rail reported a post-exceptional profit before tax of £0.8m on net revenue of £13.6m. At 31 January 2011, gross assets, subject to the disposal, were negligible.

The deal is the first decisive action from new chief executive Grant Rumbles, who was brought in two weeks ago after Mouchel released a profit warning, admitting accounting errors and over optimistic contract valuations would cost the firm £8.4m.

A spokeswoman for Mouchel said: “We have been planning to sell part of our rail business, much of our stake in Mouchel’s middle eastern joint venture and our energy business dealing with pipelines since the start of the year.

“Grant Rumbles has been brought in to run the business, not sell it off in pieces.”

Earlier this week stand-in chairmain David Sugden quit after three days in the job, following the resignation of chief executive Richard Cuthbert and chairman Bo Lerenius.

Accountants from KPMG are currently reviewing the company’s financial position on behalf of Mouchel’s banks.

Latest news

Structural steel price jumps another £50 a tonne

British Steel blames New Year's price hike on continuing high product costs
2 days ago

Green light for Birmingham Paradise landmark hotel

17-storey hotel will be the 'cornerstone' of Phase 2
2 days ago

Enabling works start at £400m Manchester First Street

Downing to start main construction in March of three resi buildings rising up to 45 storeys
2 days ago

Former BAM Nuttall chief to join Murphy

Adrian Savory to start new role as director of Major Projects division next month
2 days ago

Bouygues set for London Tustin Estate 700-home rebuild

Phased building programme to start towards the end of the year
2 days ago

Safety horror show on housing site leads to director ban

Court hears contractor ignored multiple prohibition and improvement notices
2 days ago

JV North calls up local firms for £250m new home works

Framework for home building projects worth up to £2m
2 days ago

Kier more than halves debts to below £200m

Kier chief reports steady progress in first six months of trading
3 days ago

Barhale boosts funds as it looks to rebuild turnover

Contractor confident as water companies ramp-up spending plans
3 days ago

HS2 labour agency looks to float on AIM

£23m turnover labour supply business looks to raise funds for expansion
3 days ago

Kane scores £29m M&E deal with Willmott Dixon

Off site works to play crucial role in major London estate contract
3 days ago

Graham secures third Audley retirement village

Work starts on Audley Villages site at Scarcroft, West Yorkshire.
3 days ago

Keltbray wins first deal for former nmcn infrastructure arm

Hull waste processing contract for rescued division
4 days ago

50 firms win £750m decarbonisation framework

Fusion21 framework to target 'whole building' works on homes and schools
4 days ago

Balfour Beatty UK construction MD to step down

Tom Edgcumbe to depart after just over a year as MD construction services in England and Wales
4 days ago

Crest Nicholson trebles cladding retrofit provisions to £43m

House builder revises building safety retrofit costs in face of new Government guidance
4 days ago

BAM bags £110m refurb of iconic Covent Garden tower

Landmark Seifert-designed 15-storey Space House to get two extra floors
5 days ago

Winvic to start UK’s largest speculative shed

Ellesmere Port warehouse understood to be worth around £80m
4 days ago

Kier signs deal for £169m Luton hospital revamp

Main construction work to start this month and last until 2024
4 days ago

Willmott Dixon nabs £30m Kirklees police HQ

Work to start within next few weeks on regional police HQ
5 days ago

Kier reported to be in talks to buy Tilbury Douglas

Talks reported to be at an advanced stage between both boards
5 days ago

Finance sealed for next-generation London office job

Goldman Sachs takes stake in London Bridge office project
5 days ago

John F Hunt starts giant clean-up on £110m Walsall site

Land remediation work at contaminated site will take two years
5 days ago

Build to rent boom lifts Watkin Jones profit to £52m

Surging build to rent market lifts development pipeline to £1.8 billion
5 days ago

HS2 awards £310m station lifts and escalators deal

TK Elevator signs 160 lifts and 130 escalators deal for four stations
6 days ago

Robot cutter set to revolutionise paving jobs for Eurovia

Automated system will spell end for noisy slab cutting on busy sites
6 days ago

First mass built carbon negative homes get underway

St Modwen first volume developer to build affordable carbon-negative homes
6 days ago

GMI Construction names new CEO

Lee Powell takes helm as CEO at GMI Construction in growth push
6 days ago

514-home London scheme clears final hurdle

Inland Homes declares victory after three-year planning battle over Hillingdon Master Brewer site
6 days ago

Henry Construction wins £30m Clarion housing scheme

Ravensbury estate regeneration in Mitcham is Henry's first project for Clarion
6 days ago

Contractor services