LONDON (AFX) - Shares in Jarvis continued to recover as traders warmed to
news that K Capital Partners, a Boston-based hedge fund, will be seeking a
meeting after confirming it owns almost 13 pct the troubled support services
group.
The hedge fund has reportedly not yet decided whether to press for any
changes, but is expected to scrutinise closely the proposals put forward by
Jarvis in its strategic review, set to be completed this month.
Sentiment in Jarvis, whose shares were 5 pence better at 94-1/2 by 8.35 am,
was also given a boost by the Financial Times, which told readers the stock was
undeniably cheap.

the first real public warning about jarvis was via a bbc radio documentary early this year which carefully put to gether a clear picture of how jarvis treated their subcontractors.

Debt rise pushes Jarvis into banking breach

Nils Pratley
Saturday July 3, 2004
The Guardian

Jarvis, the private finance initiative group chaired by the Conservative London mayoral candidate Steven Norris, yesterday saw its share price more than halved as it admitted having breached banking covenants.
The group, which in April admitted joint liability with Network Rail for the Potters Bar train crash, said its debts had increased to 230m, about 100m more than investors were expecting.

The collapse in the shares from 79p to 35p took the price to its lowest level for eight years. The size of the company's debt dwarfs its stock market value of just 50m.

The company's lead banks, Royal Bank of Scotland and Barclays, have extended facilities until the end of this month but some City analysts think Jarvis's survival is now in doubt.

Chief executive Kevin Hyde said shareholders would receive no final dividend for the last financial year, adding: "This is an extremely challenging time for the group and we are taking the necessary decisions and implementing them.

"We are collecting outstanding payments and have more to do. We are also taking very significant overhead cost out of the business."

Jarvis now plans to complete its full strategic review by the end of this month and conduct discussions with its lender about what it called "appropriate financing arrangements for the group in future".

Geoff Allum, an analyst at Investec Securities, said: "This is a bitterly disappointing statement, and it is an open question as to whether the company will survive in its current form and what the shares are worth.

"What I find interesting is that, when I forecast in January that a breach of covenants could happen, the company denied that it could. But here they are in breach."

The trigger for Jarvis's announcement was a settlement with Network Rail relating to a catalogue of disputes over rail maintenance work undertaken as long ago as 1998.

Jarvis will receive a 30m payment but will be forced to take a charge and write-off of 26m in its next accounts.

The group has already announced a separate charge of some 40m to cover its exit from rail maintenance.

Those sums are small compared to the latest write-offs in the accommodation services division, which mostly refurbishes schools and builds student halls. This is an area where Jarvis has been dogged by cost overruns and delays. It will take another 115m hit for the division.

There will also be a goodwill write-off of 15m in the roads business, a division which had been relatively unscathed despite Jarvis's three profit warnings in the past seven months.

One obvious strategic move for Jarvis would be to sell part or all of its 33% stake in the Tube Lines consortium, which controls sections of the London Underground, to partners Bechtel and Balfour Beatty.

The Jarvis story has unravelled at an extraordinary speed. It was a pioneer in private finance initiative projects and its share price reached 566p in March 2002, at the height of investor enthusiasm - two months before the Potters Bar train crash in Hertfordshire.

It was only in April this year that the company apologised for its original assertion that the accident was caused by sabotage, although it insisted the cause of the accident remained unclear. Seven people died when a train was derailed at a damaged set of points.

The damage to its reputation has been hard for Jarvis to combat and Paris Moayedi - who in effect created the company as a PFI leader - stepped down last year.

Mr Norris, who was a non-executive director, became chairman and has insisted that he likes the job.

"I do thoroughly enjoy getting to grips with a real business, even one with as many knots to unravel as Jarvis," he wrote in his May column in Property Week magazine.

http://www.guardian.co.uk/business/story/0,3604,1253078,00.html

Down another 28%

going same way as henlys and mayflower........

Steve Norris paid about 72,000 for his shares in JRVS in Feb & they are now worth about 11,000.

Silly boy!

Bet he wishes he won election for mayor of London, he could have got it back from us taxpayers.

post disappeared

I will try again no cannot be bothered

Time to bail out from this failure.

hlyeo98

I think the time to do that was last year or better still when the rail crashes happened.

time to do a bit of speculating on this long term no hoper short term could be interesting ??????????

You need big balls to back this one. My tip is to day trade this one. I wouldn't want exposure to this overnight.

BUYOUT PERHAPS?

can see how you got name.profitmaker +15%

Yep you got big ones!

I wondered if there might be a bounce but just didn't like the risk!