Struggling G4S Lures Misys Finance Chief

By Mark Kleinman, City Editor

The troubled security contractor G4S will on Wednesday mount a fightback against its escalating problems when its chief executive unveils the first clues about his strategy for the company and announces the appointment of a new finance director.

Sky News has learnt that G4S plans to name Himanshu Raja, a troubleshooter who helped to overhaul the balance sheets of BT Global Services and Logica during periods of corporate difficulty, as its next chief financial officer.

The announcement will come alongside half-year results which the City anticipates will underline the scale of the challenges facing the group.

Mr Raja will join from Misys, the financial software provider that was taken private by Vista Equity Partners last year, just six months after his appointment.

He is understood to have decided that the challenge of helping to reshape G4S, one of the world's largest private sector employers, was too big to turn down, and is expected to join within months.

The new finance chief will report to G4S's new chief executive, Ashley Almanza, who was himself only drafted into his current role in June.

Mr Almanza's arrival, initially as the finance director, followed a series of episodes which had damaged the company's reputation, the most notable of which was the failure to fulfil the terms of a contract to provide security staff at last year's London Olympic Games.

The fiasco resulted in Mr Almanza's predecessor Nick Buckles enduring a humiliating session in front of MPs on the home affairs select committee, and a £70m loss for G4S.

More recently, the group has been attacked by the Justice Secretary Chris Grayling over its alleged overcharging of the taxpayer for the provision of electronic tagging services.

Mr Grayling said this month that both G4S and Serco, another company implicated in the situation, would have to undertake a process of "corporate renewal" if they wished to be considered for future public sector contracts. G4S, which is being probed by the Serious Fraud Office over the issue, eventually withdrew from the bidding to renew its deal.

City analysts believe that Mr Almanza may indicate plans to launch a cash call that would see investors tapped for hundreds of millions of pounds of new capital, as well as a slimming-down of G4S through a string of disposals.

"The key question to our minds is how the company plans to deleverage, with disposals likely to be the preferred route albeit we do not think an equity rights issue can be fully discounted at this stage," said Mike Allen, an analyst at Panmure Gordon

One person close to the company said on Tuesday that Mr Almanza's more detailed outlook for G4S would not emerge until later this year but leading investors have pledged to support him on the basis of his strong track record in previous jobs.

The new boss has also had to contend in recent weeks with the arrival of Cevian Capital, one of Europe's most notorious activist investment funds, on G4S's share register.

Cevian Capital's UK operation is chaired by Lord Myners, the former City Minister who has been critical of the "absentee landlord" status of City fund managers. The Sunday Times reported at the weekend that Cevian was seeking to double its 5% stake in G4S.

The security giant, whose shares closed down 0.2% on Tuesday, declined to comment on Mr Raja's appointment.

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