Balfour Beatty has paid off a £253m convertible bond in a move that sees its debts reduce by almost half (45 per cent) for the last 12 months.
The contractor announced its plans to pay off the bond at its half year results in August stating that it was able to do so because of the strength of its balance sheet.
Balfour issued the bonds on 3 December 2013, and the repayment follows on from the repurchase of £39m of oustanding convertible bond notes in February.
In a statement the contracting giant said: ”Balfour Beatty, the international infrastructure group, today announces that it has completed the repayment of its £252.7 million convertible bond from available cash resources within the Group.
As a result of the repayment, Balfour Beatty has now paid down 45 per cent of its gross debt in the last 12 months.
The repayment, which had been scheduled to either mature or convert this week, comes days after fellow contractor Kier issues a shock £264m rights issue to raise cash from shareholders and pay down debt.
In an interview with Construciton News last week the Kier chief executive Haydn Mursell said that up to four other contractor’s are facing similar credit issues due to banks pulling out of the sector.
Speaking to CN Mr Mursell said: “One thing the banks said was their desire to reduce [credit] facilities was common across the sector, and one [bank] was very specific that four of our peers were being treated similarly. This is a sector-wide issue.”
He added: “Is this going to affect other similarly capitalised businesses in the sector? Absolutely.”