Fresh Wood disposals to generate millions of dollars

Robin Watson, Wood's chief executive. Picture: Contributed
Robin Watson, Wood's chief executive. Picture: Contributed
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Aberdeen-headquartered energy services heavyweight Wood has sold stakes in a string of joint ventures for some $28 million (£21.3m) as it continues with its asset disposal programme.

The group said the disposals comprised a 25 per cent stake in RMS A13 Holdings, a UK roads project; a 52 per cent share in Power Machinery, a China-based manufacturing facility; and a near-42 per cent holding in Centro Energia Teverola and Ferrara, two Italy-based gas power plants.

The FTSE 100 company also recently completed a sale of a 50 per cent stake in the Voreas wind farm joint venture in Italy, with proceeds of around $26m received last month.

The sales are part of Wood’s strategy to sell non-core assets in order to reduce its debt with the programme on course to generate in excess of $200m for the firm.

The four joint ventures were expected to make $8m for the group in 2019 and the company said its holding in RMS A13 carried with it “significant capital commitments” and an ongoing interest cost of about $5m.

David Kemp, Wood’s chief financial officer, said: “Together, these transactions generate cash proceeds of around $54m and make a good contribution to our non-core asset disposal programme which is a key element of our deleveraging plan.

“Our asset disposal programme is ongoing and remains on track to generate over $200m of proceeds.”

The group operates in more than 60 countries, employing some 60,000 people and generates revenues of around $10 billion.

Wood’s success in the Chinese market was recently honoured in an awards initiative aimed at highlighting business links between Scotland and China.

The China-Scotland Business Awards 2019 named the company as Scottish exporter of the year for its success in winning work with customers including the China General Nuclear Power Corporation.

Robin Watson, Wood’s chief executive, said: “Wood’s history in China can be dated back to the early 1930s and this award recognises not only our business success to-date but our commitment to expanding our portfolio in the region in future.”

The firm has also worked on the world’s largest coal-to-liquids development of its kind in China and is supporting a China National Offshore Oil Corporation gas development in the South China Sea.

The awards, organised for the second year by the China-Britain Business Council, also saw Ctrip named as investor of the year for its deal to buy Edinburgh-based travel search company Skyscanner.

Last month, Wood said it was on course to meet full-year forecasts after returning to growth in 2018. However, the firm cautioned over the recent volatility in commodity prices.