G4S to issue new shares to secure battered balance sheet

The blundering security firm has revealed its plans to cut debt and get back on track

by Gabriella Griffith
Last Updated: 28 Oct 2013
G4S, the global security firm which royally botched its London 2012 Olympic contract, has revealed its turnaround plans. Under the stewardship of new chief executive Ashley Almanza (much maligned former chief Nick Buckles stepped down in May), the firm will sell off parts of the business and issue new shares in order to cut debts.
The firm has decided to offer 140.9 million new shares – an estimated 9.99% of its current share capital – to its current shareholders and new institutional investors.
It also announced the sale of £250m worth of assets, including Canadian cash security and Columbia Data solutions businesses for an expected £100m.
In his first update since taking the helm, Almanza announced first half operating profits of £201m, down marginally from £202m a year earlier. Turnover grew 7.2% to £3.65bn but operating margins dropped to 5.5% from 5.9% a year ago.
 ‘In the near term, 2013 will be a year of consolidation for the group with the actions we are now taking starting to deliver tangible benefits during 2014,’ Almanza said.
Almanza certainly has a sizable reputational rescue on his hands. Following the debacle during the Olympic Games (its failure to provide enough security guards cost the firm some £70m), an audit in July of this year found the company had overcharged for the electronic tagging of criminals in England and Wales.

The markets have reacted positively to Almanza’s restructuring and share sale plans, following an initial drop, they are now trading up 2.98%.  

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