finance

Wood Group sells stake in Canadian joint venture for $67 million



Global engineering business Wood Group has sold its interest in TransCanada Turbines, offloading a stake worth $67m to its joint venture partner TC Energy.

The cash proceeds from the Canadian gas turbine group’s sale will be used to reduce debt.

The deal represented a multiple of about 7.6 times Wood’s share of expected 2020 earnings before interest, tax, depreciation and amortisation.

Chief financial officer David Kemp said: “Our focus on portfolio optimisation is driven by our strategic objective of building a premium, differentiated, higher margin business focused on energy and built environment markets.”

The Aberdeen-based energy and engineering services company’s half-year results in August showed that $70 worth of cost cutting had been made, as part of actions to deliver $200m of overhead savings.

Net debt excluding leases was down to $1.22bn at the end of June, from $1.77bn the same time last year and $1.42bn at the end of 2019;.

At the time Wood announced that there would be nointerim dividend while the uncertainty arising from Covid-19 and oil price volatility persists.



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