Sensor sell-off slashes Invensys debt

By MALCOLM WITHERS
Updated:

 

ELECTRICAL engineering group Invensys has sold off another part of its troubled empire, taking it more than halfway towards its target of £1.5bn of disposals. Its Sensor Systems division, a leading global supplier of controls and sensors used in the vehicle, aerospace, medical and office automation businesses, has been sold to US technology giant Honeywell for $394m (£256m) in cash.

Chief executive Rick Haythornthwaite, who succeeded controversial Allen Yurko to oversee the group's recovery and reduce debt, has now raised £900m from disposals. Today, he said the group remained 'on track' to hit the £1.5bn target by next March.

Invensys has been hit by the downturn in the US commercial construction and IT markets. The building of offices and factories in the US has been hit by overcapacity, which has led to a fall in demand for the group's products. Global demand for its IT services has been poor as the hi-tech and telecoms industry fallout has continued.

Yurko unveiled three profits warnings in less than a year before he walked off with a pension pay-off of £4.3m. In the 10 months before his departure, his salary came to £727,000. He still holds options on more than four million shares, expiring in December 2004, including 1.1 million granted last year at an exercise price of 145 1/4p. The average price of his options amounts to 203p. At today's price of 66 1/4p, up 5p, Yurko's options are still heavily under water but the shares have rallied from 33 1/4p last autumn.

Haythornthwaite has recently been awarded 912,132 share options - expiring in 2011 - at an average exercise price of 100 1/2p. The new chief has accepted a base salary of £660,000, lower than that enjoyed by Yurko. Earlier this month, Haythornthwaite bought 50,000 shares at 59.92p, taking his personal holding to 250,000 shares

Sensor Systems employs 2,700 people and has 13 factories in six countries, mainly the US and Britain, with other manufacturing facilities in Mexico, St Lucia, the Czech Republic and China.

In the financial year that ended in March, the division generated revenues of $251 million and operating profits of $36 million.

Invensys' next step could be to sell its US car parts unit, which could be worth £500 million.

Most watched Money videos