ENGINEERING and project management company AMEC took a major step in its restructuring as it announced plans for the sale of its French business for é707m.

The Cheshire-based group needs to sell AMEC SPIE - a specialist provider of services in the energy and rail industries - before it can set about separating its core energy and process management operations from its construction activities.

The company said it had agreed to sell SPIE to PAI Partners, a European private equity firm with investments including car parts specialist Kwik-Fit.

AMEC's veteran chief executive Sir Peter Mason, who will retire this year said: "We are extremely pleased to announce this important first step in our strategic restructuring."

He described the agreement as a "timely transaction at a very good price" and said SPIE would continue to invest and develop the SPIE business.

Consultations

The sale, which values SPIE at é707m, is the subject of consultations with staff representatives. Operations featured in the deal include continental-based technical services, French rail projects and 50 per cent of rail activities in the UK, together with AMEC SPIE's oil and gas activities - excluding pipelines.

The transaction is expected to be completed by the middle of the third quarter of this year, generating profits on disposal of at least é220m.

Proceeds will be used initially to reduce debt as AMEC prepares to update the market on its separation plans at interim results due on August 31. The construction business in the UK is being refocused to concentrate on design and build activities in areas such as education and health.

At the same time AMEC will look to "capitalise on profitability and growth opportunities" in energy and process markets, including through work in the nuclear sector.

AMEC employs around 45,000 people in over 40 countries, generating revenues of é5bn.

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