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CEO of UK builder Kier quits after poor response to rights issue
KIER Group chief executive Haydn Mursell is leaving the British builder with immediate effect, the company said on Tuesday, a month after many of its shareholders refused to buy into a new issue of stock.
Kier, which has contracts for major construction projects in Britain including London's Crossrail link, said chairman Philip Cox would act as executive chairman until a new CEO was appointed.
The company also said it would meet its expectations for the financial year ending June 30.
"The board believes that, following the completion of the recent rights issue, now is the right time for a new leader to take Kier forward to the next stage of its development," Mr Cox said in a statement.
Investors took up just 38 per cent of Kier's share issue in December 2018, with its top shareholder at the time - Neil Woodford-led Woodford Investment Management - deciding to take up only about half of its rights from the offer, said a source with knowledge of the matter.
That left underwriters to foot the bill for the rest of the £264 million share issue, and highlighted the pessimism among investors in relation to Britain's construction and outsourcing market following the collapse of Carillion early last year.
Kier said it had started the search for an external successor to Mr Mursell. Mr Mursell, who was appointed chief executive in 2014, joined Kier in 2010 as finance director designate.
Kier's infrastructure services and buildings businesses had won a number of new contracts, the firm said, adding the units had an order book of more than £10 billion (S$17.6 billion).
Kier's net debt was about £130 million at the end of last year, reflecting proceeds from the share sale and the acceleration of supply chain payments.
Before Tuesday's announcement, Kier's combined credit score - which measures how likely a company is to default in the next year on a scale of 100 (very unlikely) to 1 (highly likely) - was 3, Refinitiv Eikon data showed.
Kier, whose stock fell more than 60 per cent in 2018, has a market value of £847.6 million. REUTERS