Getronics NV will sell off select assets to reduce its debt and restore the confidence of customers and the financial markets, the Dutch IT services provider said Friday.
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 €319 million (US$338 million) in net debt, the company said in a statement Friday.
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 €95 million to Getronics revenue of €3.6 billion in 2002.
Divestment proceeds will be used for debt repayment and Getronics will implement a centralized management system to keep a better control of its cash, the company said.
The announcement comes a day after Getronics appointed a restructuring specialist to head Getronics Solutions Italy SpA, 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 U.S. rival Wang Global in 1999 for about €1.8 billion.
The debt-for equity offer won't be pulled, but will remain on the table for consideration by shareholders at a meeting scheduled for March 27, Getronics said.