Strategic upheaval at FCC

Madrid-based developer FCC has announced a new strategic plan which includes the divestment of €2.2 billion worth of non-core assets and downsizing the firm's headcount in troubled Spain.

Unveiling the plan, vice chairman and chief executive Juan Bejar hailed the “dawn of a new era” in which the group would seek to strengthen its financial structure and focus on the core business areas of infrastructure and environmental services.

Elaborating on the reasons for the plan, the firm said it was aiming to adapt costs “to the current situation”, put in place a debt and capital structure “in line with cash flow from businesses”, and create an international footprint “confined to more profitable areas and activities”. With “greater cash flow and lower leverage”, the company would be able to “capitalise on growth opportunities”.

Perhaps the most eye-catching aspect is the intention to sell off €2.2 billion of assets, which should help the company to reduce its debts. By 2015, FCC is aiming to have €5.2 billion of debt – some €2.7 billion less than at the end of 2012. There is speculation that the assets to be sold could include GlobalVia, the firm's infrastructure joint venture with nationalised Spanish savings bank Bankia.

FCC is planning to reduce headcount in the ailing Spanish market, with the bulk of the adjustment taking place this year. The firm's Alpine construction division will focus on its home markets of Austria, Germany, Switzerland, the Czech Republic and Slovakia. It will also look for growth in “specific” parts of the world including the US, Latin America and the Middle East and North Africa (MENA).

FCC added that it would seek to strengthen its position in environmental services in Spain, while its UK environmental services arm would expand its waste management offering.

The plan follows Bejar's appointment as chief executive last month. The infrastructure veteran had previously been chairman of GlobalVia, chairman of Citigroup Infrastructure Management and chief executive of Ferrovial Infraestructuras and Cintra. Earlier in the year, Baldomero Falcones had resigned as FCC's executive chairman. The firm has seen its value tumble since the global financial crisis.