Wood­ford leads push for change to Kier’s man­age­ment team

The Sunday Telegraph - Money & Business - - Business - By He­len Chan­dler-wilde

KIER GROUP share­hold­ers are re­port­edly work­ing to change the con­struc­tion com­pany’s man­age­ment team af­ter a dif­fi­cult six months in which in­vestors shunned a fundrais­ing at­tempt.

The fu­tures of Haydn Mun­sell, the chief ex­ec­u­tive, and Bev Dew, the fi­nance di­rec­tor, may be at risk, as Wood­ford In­vest­ment Man­age­ment, which owns 16pc of the firm, is try­ing to re­place one or both of the pair.

Neil Wood­ford, who runs the in­vest­ment group, is said to be push­ing for their ex­its, ac­cord­ing to Sky News. Other large share­hold­ers are ap­par­ently on board with Mr Wood­ford’s wishes, but no changes are thought to hap­pen in the short term un­less Philip Cox, the chair­man, finds suc­ces­sors.

Can­di­dates would ap­par­ently have to come from out­side the com­pany.

Wood­ford has in­creased its hold­ing of Kier stock in the past few weeks, which is said to add cred­i­bil­ity to its call for changes to the ex­ec­u­tive team.

The Kier man­age­ment team suf­fered em­bar­rass­ment af­ter fail­ing to win share­holder sup­port for a fundrais­ing ef­fort in De­cem­ber last year. Fund­ing was re­quired af­ter man­age­ment an­nounced its net debt in­creased from £186m in June to £624m in Oc­to­ber.

The rights is­sue did not go to plan as buy­ers for just £99m of £264m avail­able stock came for­ward.

The re­main­ing two-thirds was ab­sorbed by Nu­mis Se­cu­ri­ties, Peel Hunt, HSBC, Cit­i­group and San­tander, which had un­der­writ­ten the round. This was partly off­set by the £14m of fees paid by Kier, over­all bring­ing them £250m of new fi­nanc­ing.

Af­ter­wards, Mr Mun­sell said: “Kier en­ters 2019 with a strong bal­ance sheet which puts us in an ex­cel­lent com­pet­i­tive po­si­tion.” Kier shares fell by as much as 13pc to 335 pence, the low­est price in 15 years, fol­low­ing the rights is­sue, af­ter falls of 64pc al­ready seen in the year. The price has since started to re­cover.

The firm an­nounced the rights is­sue in Novem­ber af­ter it strug­gled to get lend­ing from banks wary of lend­ing to low-mar­gin builders.

These wor­ries were stoked by the col­lapse of Car­il­lion in Jan­uary of last year, which cost tax­pay­ers £148m.

The firm folded with debts of £1.5bn and 420 out­stand­ing pub­lic sec­tor con­tracts.

Kier Group is one of the UK’S largest con­struc­tion firms, em­ploy­ing 16,000 peo­ple. It works on in­fra­struc­ture projects in­clud­ing HS2 and Cross­rail.

The gov­ern­ment out­sourc­ing sec­tor has faced ma­jor chal­lenges since Car­il­lion went bust in Jan­uary 2018.

Debts of more than £500m at ri­val In­ter­serve caused shares to fall in Novem­ber, be­fore res­cue talks were an­nounced in De­cem­ber.

The com­pany lost three-quar­ters of its value af­ter an­nounc­ing the talks, leav­ing shares to hit a low of just 6p, from highs of over £7 a few years ago.

At that price, the 75,000-em­ployee com­pany was worth less than £10m. In­ter­serve said it planned to an­nounce de­tails of a re­struc­tur­ing early this year.

Laing O’rourke agreed re­fi­nanc­ing terms with cred­i­tors this week. Over­all, growth in the con­struc­tion sec­tor fell to a three-month low in De­cem­ber.

As a re­sult of the trou­ble in the in­dus­try, banks have be­come more hes­i­tant about lend­ing to firms.

Nei­ther Wood­ford nor Keir would com­ment this week­end.

Other share­hold­ers con­tacted by

The Tele­graph were not avail­able for com­ment.

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