Balfour Beatty will delay a planned £85m pension deficit payment, staggering payments over eight years.
The move comes just weeks after Balfour Beatty cancelled a proposed £200m share buy back after issuing a sixth profit warning in two and a half years.
In a statement to the stock market this morning, the group said it agreed terms with the trustee of the Balfour Beatty pension fund to “re-profile” an £85m deficit payment originally agreed when it sold its Parsons Brinckerhoff business last September.
The payments will now be staggered over eight years, beginning with a £4m payment next year and increasing annually thereafter.
Meanwhile, the pension fund will participate in a Scottish Limited Partnership into which Balfour Beatty will transfer £85m of PFI assets.
Balfour Beatty chief executive Leo Quinn said: “We are pleased that the pension fund trustee has worked with us to re-profile the pension payments, in light of the cancelled share buy-back.
“This gives a clear plan on how the pension deficit will be reduced over time, whilst maintaining balance sheet flexibility as we drive the required organisational change and performance improvement, as set out in the Build to Last programme we announced last week.”
Adrian Mathias, chairman of the pension fund trustee said: “We are pleased to have reached agreement with the company on this matter. We recognise the importance of a strong balance sheet to the company and welcome the opportunity to participate in the proposed Scottish Limited Partnership.”