Indebted British services firm Jarvis, has cut a rescue deal with its banks and may seek a strategic investor or takeover, it said on Wednesday, boosting its shares over 40 percent and eclipsing a record loss for the company.
Jarvis has been involved in a number of major public private partnership projects in Ireland, predominantly in the education sector.
Once Britain's biggest construction and engineering firm, Jarvis's fortunes slumped after train derailments on tracks that it maintained.
But it staved off financial collapse earlier this month by selling its stake in London's underground rail network.
Jarvis said it had now reached a refinancing deal that would run until March 27, 2006, and would provide a further £5.5 million sterling of bond facilities.
Chief Executive Alan Lovell said the company's immediate focus was on completing this refinancing. He added that by the second quarter of 2005 it could look for a potential suitor, but Jarvis was not currently in any talks.
"Conceivably we could get a strategic investor, a takeover of the business, or a debt-for-equity swap," Lovell said. "There's no hurry for any of this."
The company posted a £283 million pretax loss for the six months to the end of September.
Jarvis said its loss, which compared with a pretax profit of £33.7 million pounds a year ago, related mainly to the write-off of goodwill in its roads business, provision for construction losses and the write-off of aged debtor balances.
However, its shares -- which have lost around 90 percent in value this year -- rose 47 percent to 26.5 pence in morning trade on relief over its refinancing and hopes of a future buyout.
Jarvis now has a stock market value of around £40 million. The company had been under pressure to raise cash after racking up around £250 million of debt over the rail derailments and cost overruns.
Lovell said Jarvis hoped to cut its debt to £240 million pounds by March, and a spokesman said the company hoped to complete its refinancing within the next month.
He added that following the completion of the group's restructuring, Jarvis would focus on railroad and plant operations, and have an annual turnover of £500 million.