Mouchel eyes fundraising to tackle debt pile

City A.M. Reporter
INFRASTRUCTURE firm Mouchel said yesterday it is considering an equity fundraising as it looks to tackle debts and restructure the company this year.

Still recovering from a 2011 dominated by contract blunders, management resignations, failed takeover bids, tough trading and a banking lifeline, Mouchel said 2012 would be a year of transition and earmarked annual savings of £18m.

The company said: “All options are being evaluated to address the capital structure of the group, including a significantly dilutive equity raise.”

Mouchel rejected a £330m takeover bid from VT Group in 2010 and further bids from Costain and Interserve last year. Meanwhile the group also said yesterday it had made an underlying pre-tax loss of £6.3m for the six months to the end of January, down from a £4.1m profit in the same period a year ago. Net bank borrowings stood at £104.1m at 31 January, an increase of £7.2m from the same time the previous year. Mouchel said the group would split into two divisions to focus on core markets; infrastructure services, which will run highways work and its Middle East operations; and business services, which will run local government outsourcing work.

Chief executive Grant Rumbles said: “2012 is a year of transition for Mouchel. The first half of this financial year has remained challenging, but we are seeing signs of stabilisation in our core markets.”