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Ferrovial hires Goldman Sachs to sell Amey

Spanish construction giant Ferrovial has appointed advisers including Goldman Sachs to draw up plans as it eyes the sale of its UK subsidiary Amey, CN understands.

The UK roads and infrastructure contractor has been up for sale since October as part of a general disposal of the services division.

In a statement, Ferrovial said: “Ferrovial notified the CNMV [the Spanish financial regulator] on 16 October that it has engaged an external consultant to explore the possibility of divesting part or all of the assets of the services division that the company owns directly or indirectly.”

The sale comes months after Amey’s provision for its Birmingham roads deal contributed to Ferrovial posting a £46m loss for the first half of 2018.

The Spanish group’s earnings before interest and tax for H1 fell to -€52m (-£46m) from a €305m (£270m) profit for the same period in 2017.

Amey has been engaged in a high-profile legal tussle with Birmingham City Council in the past year over costs attributed to an Amey subsidiary, which had been contracted to carry out major road upgrades and maintenance for the authority.

In notes from its audit committee meeting held last month, the council claimed that Amey LG – a subsidiary of Amey – had refused to pay the £55m plus interest owed to Amey Birmingham Highways Limited (ABH), and “therefore the council”.

ABH is the special purpose vehicle contracted by Birmingham City Council to deliver a 25-year highways contract.

In June Amey was ordered to pay the council’s resubmitted £55m claim having lost a Court of Appeal judgement in February as part of a four-year-long dispute.

Amey had set aside a provision of up to £210m for losses on the highway maintenance contract with Birmingham.

However, the firm has continued to pick up contracts, notably a £70m extension with Kent County Council to maintain its highways portfolio until 2020, and a £49.7m contract to improve roads across the North-west. 

Amey declined to comment. Goldman Sachs declined to comment.

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