ALAN LOVELL, chief executive of Jarvis, has devised a 12-day rescue plan intended to save the company from financial collapse.

The high-risk strategy involves the crisis-hit infrastructure-to-railtrack renewal company concluding 15 transactions, a refinancing and the publication of interim results. Lovell wants to achieve all this before Christmas amid fears that suppliers and customers are running out of patience.

If this is achieved, his long- term plan is to bring in a strategic investor to acquire up to 40% of the company. This could be accompanied by a debt-for-equity swap with banks.

The chief executive believes he can now sell the group’s one-third stake in Tubelines, the private-sector consortium that has a contract to manage a third of London Underground. This is worth more than £100m. Ferrovial, the Spanish group that owns a one-third stake in Tubelines, has submitted an offer to buy the Jarvis holding. The other bidder is Star Capital.

Lovell is also hopeful that by December 25 he can have concluded deals resolving the future of all 14 private-finance initiatives involving schools, hospitals and university accommodation projects.

Work has stopped at all sites. The intention is to raise £100m to finish these projects and have no ongoing interest.

Talks to provide this capital are being held with co- investors as well as holders of a £70m “performance bond” and the group’s banks. The intention is for four contracts to be handed over to Vinci, the French contractor. Of the other 10, four are 90% completed. They will all be finished and the facilities-management contract later sold.

Lovell acknowledges that the rescue plan is ambitious and riddled with potential problems. He said: “We’ve come a hell of a long way, but we still have a long way to go.”

If disposals are achieved in the time frame, Jarvis will then be able to extend its £250m bank loan for a further year. The loan is split between two groups. The biggest is a syndicate led by Royal Bank of Scotland and Barclays. The other is a $175m (£91m) US loan note.

This will be accompanied by long-awaited half-year results, which could include a £100m-plus write-off, mainly relating to construction write-offs and advisory fees. Jarvis has been advised by Gazelle, the boutique investment bank, Dresdner Kleinwort Wasserstein, Hawkpoint and an American restructuring specialist, Alex Partners, which has been secretly advising the company for the past six months.

Lovell intends to rebuild Jarvis around its core business of track renewal, plant hire and roads. This should produce sales of £500m a year and an operating profit of £35m.

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