Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wood Group to sell industrial services unit to pare debt

Published 05/02/2020, 17:56
Updated 05/02/2020, 18:01
© Reuters.  Wood Group to sell industrial services unit to pare debt

© Reuters. Wood Group to sell industrial services unit to pare debt

(Reuters) - Oilfield services provider John Wood Group Plc (L:WG) said on Wednesday it had agreed to sell its industrial services business to technical services provider Kaefer for an initial cash consideration of about $104 million (79.70 million pounds).

Aberdeen-headquartered Wood said the deal includes a further potential payment of up to $14 million when agreed upon financial goals are met. Sale proceeds will be used to cut debt, the company added.

"As our focus has moved towards building a premium, differentiated and higher-margin business, the industrial services offering is no longer core to our strategy," Chief Financial Officer David Kemp said in a statement.

The divestment of the unit, which reported a pretax profit of $8 million in 2018, follows the announced sale of its nuclear energy business for about $305 million to Jacob Engineering (N:J) last year to reduce its debt burden.

Britain's competition watchdog has been assessing if the proposed Wood Nuclear sale would hurt competition in the UK or other markets.

Wood's debt surged in 2017 when it paid $2.7 billion for Amec Foster Wheeler to expand into the U.S. onshore shale oil and gas sector.

The company, which has already sold some of its non-core assets, said last month it had trimmed debt below $1.5 billion by end-2019, from $1.77 billion at June-end.

Wood's industrial services business provides fabric maintenance for marine, process energy, offshore oil and gas and infrastructure sectors in Britain and Ireland.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.