Chief executive Mike Jeffries said he considered selling all of the group鈥檚 PFI stakes, but he now plans to hold on to a small chunk to protect the company鈥檚 commercial interests.
He said: 鈥淔ive years ago, I had intended to sell all the equity, but I now think we have to ensure that we don鈥檛 sell it to our competitors.鈥� He added that, by retaining a small stake, Atkins could maintain its relationships with consortium members and bid with them for future projects.
Jeffries said he would also consider refinancing some of the group鈥檚 PFI debts after the completion of the construction phase to achieve better repayment rates. This follows plans of Balfour Beatty and Laing to refinance their PFI debt (15 October).
Earlier this year, Kvaerner said it was selling all of its equity stakes. Bankers predict that other construction firms will not take this route, but will choose instead to follow Atkins in selling most of their equity holding while keeping a toe-hold with smaller stakes.
The equity that Atkins is considering selling is known as 鈥渟ubordinated debt鈥� or 鈥渜uasi-equity鈥�. It carries a lower risk than standard equity, because if a project goes into liquidation, it are repaid before shareholders. The rate of interest the consortium can charge is therefore lower than the likely rate of return on its equity stake.
One City banker said that it would be sensible for Atkins to sell its subordinated loans. 鈥淎long with refinancing, it provides another exit route for cash that would otherwise be locked up,鈥� he said. 鈥淭hey could sell the remaining equity at a later date for a much higher return.鈥�
Jeffries stressed that, although the new policy was likely to be put into action at a later date, no timetable had been set on particular projects.
However, it is understood that Aktins is already refinancing its debt on the Bridgend Prison project in Wales.
