Spanish giant Ferrovial, owner of UK government contractor Amey, has reduced the value of the business by £660m
Ferrovial revealed the book value of Amey, whose 20,000 employees sustain train tracks, escort prisoners and house armed forces personnel, was now only €103m (£88m) after a €774m write-off.
Amey has embattled several financially troubling deals including a £48m loss on the M8 motorway upgrade in Scotland last year.
Ferrovial said: “Amey’s value has been affected by the situation of the UK services sector in recent years, due to numerous uncertainties attributable to budget cuts by local administrations, among other factors.
“Moreover, contractual disputes have proliferated between service providers and their clients.”
Amey is currently caught up in a major dispute with Birmingham City Council over its £2.7bn highways maintenance contract.
Ferrovial added: “Amey has a PFI (Private Finance Initiative) agreement signed in 2010 with Birmingham City Council, which retained all related payments in 2018.
“The UK subsidiary, and the other stakeholders involved in the contract, are negotiating with the Council to attain a solution that is satisfactory to all parties.”
Amey was taken over by Ferrovial in 2003 for £81m. In 2013 it paid £385m to acquire Enterprise, which it merged with Amey to increase its size.
Ferrovial announced it was looking to sell Amey in December 2018 citing the company wishes to focus on transport infrastructure as the main reason.