(Alliance News) - John Wood Group PLC shares climbed on Wednesday after the company said it is mulling "capital allocation options" after sealing a deal to sell its Built Environment consulting business to WSP Global Inc.
The energy sector-focused engineering and consulting business struck a deal to sell the unit in June. It received gross proceeds of USD1.94 billion and estimates net cash proceeds of USD1.67 billion.
The proceeds have "immediately reduced our net debt position", the company said.
"The completion of this transaction has reduced the group's net debt and has restored our financial flexibility. We are currently exploring our capital allocation options, with a particular focus on options that will improve free cash flow generation," John Wood added.
Chief Executive Ken Gilmartin said: "We are very pleased to have completed the sale of our Built Environment Consulting business to WSP. This transaction marks a new chapter for Wood - the proceeds have transformed our balance sheet and restored financial flexibility to the group."
"Wood has an exciting future ahead as we capture growth opportunities across the energy and materials markets. We are developing our updated strategy and will outline more details, including our approach to capital allocation, at our capital markets day in November."
John Wood shares ended 5.8% higher at 136.81 pence each in London on Wednesday.
By Eric Cunha; ericcunha@alliancenews.com
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Wood Group (J) (WG.)