Mouchel asks shareholders to seal bank rescue deal

INFRASTRUCTURE company Mouchel today urged shareholders to back a rescue deal that will see its banks take a controlling interest in the business in return for wiping out a large chunk of its debt pile.

The firm, which provides consulting and business services on road building and other public sector projects, warned it will collapse under a £140 million debt if investors do not approve the equity swap.

Barclays, Lloyds and Royal Bank of Scotland will release £87m of debt in exchange for a controlling stake in the business, safeguarding 8,000 jobs and leaving Mouchel with a more sustainable £60m of debt.

The deal will ultimately see Mouchel shares delisted from the London Stock Exchange on 25 September after payment of a 1p special dividend to shareholders. The agreement is subject to investor approval at a general meeting on 24 August.

Chief executive Grant Rumbles said: “We have continued to work with our customers, suppliers, employees and other key stakeholders to implement our strategic actions and we are encouraged by the progress made.

“With the continued support of our lenders, we now look to take Mouchel forward from here as a privately-owned company.”

Mouchel has bases in Glasgow and Perth, from where its Scotland TranServ joint venture with Balfour Beatty manages the trunk road network in the north-west of Scotland.

Last year, the group turned down takeover offers from rivals Costain and Interserve for more than £150m, saying they undervalued the company. Since then its market value has fallen to around £1.2m.