20th Nov 2018 12:57
LONDON (Alliance News) - Babcock International Group PLC said Tuesday the US financial firm Capital Group Co Inc halved its stake in a transaction last Friday, as Babcock faced increasing pressure from reported difficulties.
Capital Group held 24.5 million shares in the engineering services firm after the transaction, equivalent to a 4.8% stake in the 505.6 million shares outstanding in Babcock. Prior to the transaction, Capital Group held a 10.0% stake in the firm.
Shares in Babcock were 0.2% higher at 590.20 pence on Tuesday.
On Monday, Babcock announced its did not expect the cash costs of its restructuring programme to be "material" following press reports it was set to record significant exceptional costs in its interim results. Babcock is slated to release its results for the six months to September 30 on Wednesday.
Last week, Babcock was forced to issue a statement refuting claims by a research firm about the health of its balance sheet and key commercial relationships.
In a report released in October, Boatman Capital alleged Babcock systematically misled investors by burying bad news about its performance. The research firm also argued there was a breakdown of the relationship with its largest customer, the UK Ministry of Defence.
Babcock described the claims as "false and malicious" and was seeking to "discover who is behind Boatman Capital."
The MoD at the time confirmed Babcock remained a "key part" of equipping the department, but press reports suggested it had put the firm under "extra scrutiny" over a submarine support contract.
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