James Fisher sells loss-making nuclear services division for £3
James Fisher divestments gain momentum as the shipbuilding group sells its loss-making nuclear services division to a private equity firm for just £3
- JFN sold for £3 to Myneration, an investment vehicle of Rcapital Partners
- Myneration will provide a £3 million secured revolving credit facility to fund growth
- James Fisher expects 2022 operating profit to be “in line” with 2021
James Fisher & Sons has sold its loss-making nuclear decommissioning services division, JFN, to a British private equity firm for a nominal sum of just £3.
The deal is the latest of several recent divestments as the London-listed shipbuilding group seeks to pay off its debt after a difficult few years.
Myneration, an investment vehicle managed by private equity firm Rcapital Partners, will acquire JFN and provide a £3 million revolving credit facility to fund the company’s future growth.
James Fisher’s JFN division will report an operating loss for 2022
Jean Vernet, CEO of James Fisher: ‘The sale of JFN is another step in the execution of our strategy to rationalize and focus the portfolio. in streamlining the Group’s operations and strengthening its balance sheet.
“JFN has a number of valuable and unique capabilities and requires the right investment to capitalize on the market opportunity.
“We are pleased to have found the right owner in Rcapital for the next chapter in the development of this company.”
In December, the group sold four businesses, including its maritime services vessel, Swordfish, to India-based Seamec.
The sale of Prolec, Mimic and Strainstall netted James Fisher a total of around £18.4 million, while it received £20 million for Swordfish in January, it confirmed today.
Analysts from Peel Hunt said the latest sale was “sensible” and should help boost the group’s profits.
James Fisher expects revenue from continuing operations to be around £475m for 2022, up from £442.4m in 2021, and an operating profit to be in line with 2021.
JFN will be reported as a discontinued operation and will record an operating loss.
Analysts from Peel Hunt noted that no major new contracts for JFN have been announced in the second half of the year, and business at the division is not expected to improve anytime soon.
“We maintain our Hold rating and 400p TP, but are confident in the quality of the group’s key market leading businesses,” they said.
“We expect to upgrade as soon as trading improves or further inventory weakness.”
Josie Richardson, director of investment at Rcapital, said the fund would support the company “as it enters a new phase of growth and development.”
“JFN plays a vital role in the UK’s nuclear decommissioning industry and therefore in the implementation of the government’s strategic energy plan,” she said.
‘The management team, industry-leading technical services and unique UK experience in specialist areas provide us with a strong position.’
James Fisher said it has made a number of parent company guarantees to JFN in the past, which will remain in effect.
Shortly after the completion of the deal, an unsecured loan of £1.2 million to JFN will be repaid to James Fisher, who himself will make available to the divested business a secured interest-bearing term loan of up to £3.5 million.
James Fisher shares fell 5.2 percent to 370p in morning trading on Monday. They have lost about 20 percent of their value in the past year.