Shares dive in trou­bled Kier after firm forced to re­vise debt po­si­tion


SHARES in Kier Group tum­bled by more than 12 per cent after the trou­bled in­fra­struc­ture gi­ant was forced to re­vise its debt po­si­tion by £50.5 mil­lion.

The com­pany told the City it had al­tered its net debt po­si­tion at December 31 to £180.5m from £130m, as pre­vi­ously sig­nalled in a trad­ing up­date on Jan­uary 22.

Kier said it has re­vised the clas­si­fi­ca­tion of debt as­so­ci­ated with cer­tain de­vel­op­ment as­sets held for re­sale at December 31. This debt bal­ance, to­talling £40.2m, was orig­i­nally con­sol­i­dated within as­sets held for re-sale on the group’s bal­ance sheet.

The debt, fol­low­ing the re-clas­si­fi­ca­tion, has now been in­cluded in the net debt po­si­tion. Kier also had iden­ti­fied a num­ber of ad­just­ments re­lat­ing to its hedg­ing ac­tiv­i­ties, to­talling £10.3m.

The move to re­vise the com­pany’s debt po­si­tion comes after it launched a £250m rights is­sue to re­duce its debt and strengthen its bal­ance sheet late last year. How­ever, nearly two-thirds of in­vestors snubbed the cap­i­tal raise, leav­ing a syn­di­cate of banks nurs­ing a £100m headache. Shortly after, it parted com­pany with chief ex­ec­u­tive Haydn Mursell.

David Mad­den at CMC Mar­kets said: “In late Novem­ber 2018, the com­pany launched a rights is­sue be­cause it was con­cerned about banks un­will­ing­ness to lend to the con­struc­tion sec­tor. The lat­est debt fi­asco has rocked in­vest­ment sen­ti­ment fur­ther. The stock has been in de­cline since Septem­ber, and a break be­low 400p might bring the 335p area into play.”

Kier said: “Whilst the board notes the cur­rent po­lit­i­cal and eco­nomic un­cer­tainty in the UK, and the im­pli­ca­tions for third party in­vest­ment, the group re­mains on course to meet its un­der­ly­ing FY19 ex­pec­ta­tions.”

Kier was work­ing on the restora­tion of Glas­gow School of Art when it was hit by fire last year. It had been the main con­trac­tor on the restora­tion of the Mack­in­tosh Build­ing after a first fire in 2014, and had made sig­nif­i­cant progress be­fore the sec­ond blaze. Shares closed down 59.8p at 437.4p.

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