Shares in Britain's Invensys climbed by up to a third this morning amid hopes the battered engineering firm might sell off more assets to pay back debts and help it cope with tough trading conditions.
The former powerhouse of British industry is looking to sell parts of its energy management division and may also break up its development business, the Daily Telegraphnewspaper reported, without naming its sources.
A spokesman for Invensys declined to comment. The firm is due to issue a trading update on April 15th.
"They've got about £5 billion [sterling] of sales and about £1.4 billion of net debt and the sales are very low margin now," said Mr Tony Lancelott, an analyst at stockbrokers Arbuthnot.
"So they basically need to restructure or sell businesses." Invensys shares, which have fallen over 90 per cent in the past year, climbed as much as 34 percent in heavy volume. Shortly after 9 a.m. today, they were 17 per cent higher at 12 pence.
Formed in 1999 when Siebe acquired diverse engineering group BTR, Invensys makes controls and automation equipment for factories, offices and homes.
It has been hit by a downturn in telecoms and information technology services and a weak US commercial buildings market, forcing it to slash jobs and sell assets to cut debt.
The firm completed a £1.8-billion asset disposal programme in December.
But some analysts think more will have to be done, after Invensys warned in February that core operating profits in the second half of the year to end-March could fall 25 per cent from the first half because of problems at Dutch software unit Baan.