Jarvis secures future

As predicted by CJ last week, Jarvis has been saved. On Monday morning it announced that the £146.8m sale to Amey of its one-third stake in TubeLines had been completed.
Jarvis has now drawn a line under its "troubled financial history". The group's lenders have extended their financing arrangements through to March 2006.
As well as selling its TubeLines stake, Jarvis has signed "binding refinancing agreements" for all 14 of its largest unfinished construction projects (see box). The deal called for an extra £110m of refinancing.
Jarvis has contributed £51m of this total, the £59m balance coming from the other project stakeholders. Nine of the 14 projects will be completed by Jarvis. Vinci is thought to be in line for the remainder, although the group refused to comment.
Amey chief executive Mel Ewell welcomed the completion of the TubeLines acquisition.
"We are delighted. This is a great statement about Amey's strength. Eighteen months ago you wouldn't have bet that we could do it, but Amey's turnaround has been spectacular," he said.
Ferrovial, a Spanish construction group, turned up as a white knight to save Amey in summer 2003.
Bechtel, holder of a one-third stake in TubeLines, manages the capital spend on the London Underground PPP project, while Amey, now holder of a two-thirds stake in the consortium, will oversee the maintenance and day-to-day operations.
The rival bidder for Jarvis's stake in TubeLines was Smif, a fund owned by Star Capital, a private equity group.
TubeLines will pay no dividend for the first seven years of the contract, therefore restricting Amey's returns during that period to the profit on its management input.