Kentz to float with potential value of €280m

Irish-Malaysian engineering group Kentz is planning to launch on the London Stock Exchange within weeks with a potential value…

Irish-Malaysian engineering group Kentz is planning to launch on the London Stock Exchange within weeks with a potential value of €280 million.

The group, which grew out of the old MF Kent business that was saved from insolvency in 1994, is planning an initial public offering (IPO) on London's Alternative Investment Market (AIM) in February.

The company did not say yesterday how much of its equity it intends to offer for sale to investors, or how much it is planning to raise, but it is estimated its total value on flotation will be between €200 million and €280 million.

Malaysian group Peremba own 80 per cent of Kentz while chief executive Hugh O'Donnell and director Noel Kelly hold 10 per cent each. Last year the firm had a turnover of €260 million and profit before tax of €17 million. Its financial year end is December 31st, so Kentz has yet to finalise accounts for this year.

However, it is understood that its figures for the first six months of this year were ahead of those for the same period in 2006.

Kentz is registered in Jersey, but its origins can be traced to MF Kent, founded in 1919. It has a large operation Gurtnafleur, Co Tipperary, while its senior management including Dr O'Donnell is Irish. The firm has done some work in this country, such as supplying electrical services to the Blackrock Clinic, Galway but has focused on growing business growth abroad for the last decade.

Kentz is planning to float despite tough stock market conditions as it focuses on servicing industries such as oil and mining. Record oil prices and strong commodity markets mean that these sectors are increasing capital expenditure, which in turn drives demand for the group's services.

Some 7,000 people are employed in the firm. It provides services to the oil, gas, mining and metals industries, as well as transnational engineering groups such as Flour and Bechtel and Krupp Uhde. The group is active in a number of regions, including the Middle East and the Pacific Rim.

Kentz specialises in the area of instrumentation, which involves designing and supplying control systems for process plants; that is facilities used for oil refining, manufacturing chemicals and pharmaceuticals. Its predecessor, MF Kent, hit the headlines in the early Nineties when it became one of the first companies to go into examinership, which gave it High Court protection from the banks to which it owed £11 million punts while it worked on a rescue plan. Its problems stemmed from the fact that US-Japanese-owned Hovisa, for whom it was building a $35 million hotel in Barcelona, was given protection from its own creditors. The situation was complicated by the fact that the company had overborrowed against other contract payments.

Peremba rescued it, acquiring 60 per cent of the group for £7.75 million. Its creditors AIB and Banque Nationale de Paris received £4 million of an £;8.6 million debt.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas