Dutch IT services provider, Getronics, will sell off select assets to reduce its debt and restore the confidence of customers and the financial markets.
New management at Getronics, appointed late February, no longer backs a debt-for-equity swap offer to bondholders made by the previous management team. Instead, Getronics will sell noncore and underperforming assets to clear its $US337 million in net debt.
Negotiations to sell Getronics Human Resource Solutions (GHRS), the unit that offers outsourced payroll services, are already under way and a sale is expected in the coming months, Getronics said. GHRS contributed $US100 million to Getronics revenue of $US3.81 billion in 2002.
Divestment proceeds would be used for debt repayment and Getronics would implement a centralised management system to keep a better control of its cash, the company said.
The announcement follows Getronics appointment of a restructuring specialist to head Getronics Solutions Italy, one of the company's biggest loss-making units.
Getronics is one of Europe's largest providers of IT consulting, integrating, implementing and managing services. Desktop outsourcing and management is one the company's biggest businesses.
Getronics' financial situation deteriorated over the past years as a result of goodwill impairment charges and worsened market conditions. The company's amassed much of its debt when it bought US rival Wang Global in 1999 for about $US1.9 billion.
The debt-for equity offer would not be pulled, but would remain on the table for consideration by shareholders at a meeting scheduled for March 27, Getronics said.