Invensys in £350m US sell-off

NEW Invensys chief executive Rick Haythornthwaite made his first move to reduce the engineering group's £3.3bn debt mountain by selling off its power storage business for $505m (£350m).

Shareholders may also get a 28% stake in the purchaser, EnerSys which is based in Pennsylvania. EnerSys's acquisition of Invensys subsidiary Energy Storage Group will make it the world's largest industrial batteries company.

ESG is a supplier of standby and motive batteries and battery chargers. These are used to supply back-up power to ensure that equipment, mainly in the telecoms and information technology industries, will continue to operate.

Privately owned EnerSys is controlled by Morgan Stanley Capital Partners, which will issue warrants to Invensys that, if exercised, will give it a 28% in the US group. Insiders believe that EnerSys could now float to enable Invensys to realise its warrants. The Americans will also supply Invensys with products and equipment for its Power Systems division.

EnerSys markets brands such as Exide and Hawker. Many of them are used in forklift trucks. ESG has 15 manufacturing facilities in nine countries and employs 5,000 people.

The deal will have to be cleared by regulatory authorities in the US, France and China. Haythornthwaite said: 'This significant transaction continues the board's focus on reducing the level of indebtednessî

Invensys shares moved ahead 4 1/2p to 135 1/2p.