James Fisher’s disposals gather pace as marine engineering group sells loss-making nuclear services division to private equity firm for just £3
- JFN sold for £3 to Myneration, an investment vehicle of Rcapital Partners
- Myneration will provide a £3m secured revolving credit facility to fund growth
- James Fisher expects operating profit for 2022 to be ‘in line’ with 2021
James Fisher & Sons has sold its loss-making nuclear decommissioning services division, JFN, to a UK private equity firm for a nominal consideration of just £3.
The deal is the latest of several recent disposals as the London-listed marine engineering group looks to pay off debts after a difficult few years.
Myneration, an investment vehicle managed by private equity firm Rcapital Partners, will acquire JFN and provide a £3million secured revolving credit facility to fund the growth of the business going forward.
James Fisher’s JFN division will report an operating loss for 2022
James Fisher chief executive, Jean Vernet, said: ‘The sale of JFN is a further step in the implementation of our strategy to rationalise and focus the portfolio and, taken together, the business and asset disposals made over the last three months are important steps in streamlining the Group’s operations and strengthening the balance sheet.
‘JFN has some valuable and unique capabilities and requires the right investment to exploit the market opportunities in front of it.
‘In Rcapital we are pleased to have found the right owner for the next chapter in this business’s development.’
In December, the group sold four businesses, including its marine services vessel Swordfish to India-based Seamec.
The sale of Prolec, Mimic and Strainstall netted James Fisher a total of around £18.4million, while it received £20million for Swordfish in January, it confirmed today.
Analysts at Peel Hunt said the latest disposal was ‘sensible’ and should help boost profits at the group.
James Fisher expects to report revenues from continuing operations of around £475million for 2022, up from £442.4million in 2021, and for operating profit to be in line with 2021.
JFN will be reported as a discontinued operation and will post an operating loss.
Analysts at Peel Hunt noted that no significant new contracts were announced in the second half of the year for JFN, with trading at the division not expected to improve fast.
‘We retain our Hold rating and 400p TP but are confident in the quality of the group’s core, market-leading operations,’ they said.
‘We expect to upgrade as soon as trading improves or on further stock weakness.’
Josie Richardson, investment director at Rcapital, said the fund would support the business ‘as it enters a new phase of growth and development’.
‘JFN plays a crucial role in the UK’s nuclear decommissioning industry and, hence, the delivery of the Government’s strategic energy plan,’ she said.
‘Its management team, market-leading technical services and unique UK-based experience in specialist fields put it in a strong position.’
James Fisher said it has historically given a number of parent company guarantees to JFN, which will stay in place.
Shortly after the completion of the deal, an unsecured loan of £1.2million made to JFN will be repaid to James Fisher, which itself will make a secured interest-bearing term loan of up to £3.5million available to the disposed business.
James Fisher shares fell 5.2 per cent to 370p in morning trading on Monday. They have lost around 20 per cent of their value over the last year.