G4S sells shares to push down £2bn debt pile

SECURITY group G4S yesterday drew a line under the swashbuckling era of former chief executive Nick Buckles as it announced a series of drastic moves designed to avoid an embarrassing credit rating downgrade.
G4S – whose reputation took a battering after it failed to supply enough guards for last year’s Olympic Games – yesterday raised £350m through a major share placing.
New boss Ashley Almanza also confirmed the sale of two businesses in Canada and Colombia which, when combined with other planned disposals, are expected to bring in an additional £250m.
In marked contrast to Buckles’ ambitious bid to merge G4S with Danish outsourcer ISS, Almanza said the decision would allow the company to pay down its £2bn debt pile and seek “sustainable, profitable growth” through other avenues.
Almanza also decided to take substantial write-downs during the first half, resulting in a loss of £87m for the first six months of 2013 – a move analysts suggested was an attempt to get as much bad news out of the way as possible, also known as kitchen-sinking.
Investors responded positively and the company, which had been at risk of falling out of the FTSE 100, was one of the biggest risers on the index, closing up 2.9 per cent.
“G4S is attempting to turn the page on its Olympics fiasco,” said analyst Keith Bowman of Hargreaves Lansdown.
“News that the dividend is to be held is a key positive, providing a degree of share price support, whilst the track record of new management appointments generates some confidence.”
Yesterday’s successful placing of 141m G4S shares reunited City veterans Mark Astaire and Nigel Mills, old colleagues from their days at Hoare Govett.
Mills, currently Citi’s chairman of corporate broking, led a team that included Charlie Lytle and Anna Reynolds.
The Citi team worked as joint brokers, global coordinators and book runners alongside JP Morgan Cazenove – whose team included head of corporate broking Edmund Byers, vice president Andrew Truscott and head of UK equity capital markets Greg Chamberlain.
Additional bookrunning duties were provided by Astaire’s Barclays team. Currently vice-chairman of investment banking, Astaire was poached last year from Bank of America Merrill Lynch, where he had been since 2004.
His colleagues on the placing included Adam Welham, and Richard Probert. Welham, who is currently head of European equity syndicate at Barclays’ investment bank, previously worked at UBS for 12 years. Probert is the head of EMEA services at Barclays and has worked for Credit Suisse and HSBC.