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No surprise Amey is for sale

https://newsroom.ferrovial.com/en/press_releases/annual-results-2018/

It is no surprise that Ferrovial is selling Amey.

In its annual report for 2018 released today (28 Feb.), Ferrovial states that Amey (bullet pt. #2) suffered a net loss of €448 million (= £358 million)  

This was a result of gargantuan “write down” or devaluation of the worth of Amey. That value was slashed in today’s annual report by £660 million and “fair value“for an expected sale was set at £88 million. [It is the equivalent to a house in the more upmarket parts of Sheffield that was on the market last week for £660,000 now being available at a “reduced-for-quick-sale” price of £88,000.]

Only time will tell whether a buyer, likely a “strip and flip” private equity firm, will even pay £88 million for Amey.  Goldman Sachs is handling the sale.  

Most other Ferrovial divisions are doing rather nicely, as the report suggests.  

Despite the huge 2018 loss, Amey has two main assets: 1) it has recently won several large paving contracts in the UK; 2) it is involved in several large PFI contracts, including in Birmingham and Sheffield. [For more on Amey, see https://en.wikipedia.org/wiki/Amey_plc].

The Birmingham PFI is being wound up…and if SCC had any sense, it would be wind up Streets Ahead as well. As a PFI expert said today, “It is in Sheffield CC’s interest to speak out now as it is likely to be much better getting out of the contract ASAP; it would be much better than staying quiet and being retained contract under private equity control when they start turning the screw!”

Sheffield residents will be paying, on average, £1.75 million per week to Amey and its two partners for our PFI deal until 2037 and, because of SCC’s supplementary borrowing, until 2055. PFI payments are guaranteed by Westminster.

An accounting expert working with AMEY OUT will be examining today’s Ferrovial accounts in detail and we hope to share his conclusions later in March. He will also make some predictions on the likely effect on Sheffield of a sale to a private equity firm.