Kier agreed to sell his residential company, Kier Living, to a new company owned by financier Jay Hands, founder of Terra Firma. The deal, announced this afternoon, is for a sale of £ 110 million, to be paid in cash by Foster BidCo upon completion of the deal, which is expected before mid-June if Kier’s shareholders agree to the deal at a public meeting. The £ 110 million deal matches the fair value that Kier placed for the company in June 2020. Kier will receive a net proceeds of £ 100 million from the sale. The bulk of this, £ 75m, will be used to reduce the company’s debt; £ 10 million will go into the pension scheme to shrink her deficit; The remaining £ 15 million will be held as cash reserves. Terra Firma paid Kier a deposit of £ 40m, which is largely non-refundable and will be held in escrow until the transaction is complete.The sale is designed to bolster Kier’s balance sheet, but the company said it is still considering a potential capital increase. . Kier Living has been on sale since June 2019 and incurred a loss of £ 84 million in its most recent financial year. The bulk of the loss was related to a £ 50 million loan write-off to another residential company, Kier Caledonia Homes, because it lacked the means to repay it. According to today’s stock exchange announcement, additional payments will be made upon completion to cover Kier’s provision of working capital to finance Kier Living from July 1, 2020 through completion. In the statement, Kier’s board of directors said it believed the sale would reduce net debt, reduce working capital volatility, remove capital requirements to support land tenure within Kier Living to maintain the current level of sales completion, and remove the unbalanced balance and debt paper associated with some joint ventures for Kier Living, simplifying the group to allow it to focus on its core business of infrastructure, construction and property services. Debt reduction has been central to Andrew Davis’ strategy since he became CEO in April 2019, following the company’s failed debt-for-equity swap. “The actions we have taken over the past two years have created a robust operating platform for achieving sustainable profitable growth and free cash flow,” said Davis. The elimination of Kier Living provides another major milestone in the group’s strategy to streamline the business and strengthen its balance sheet. Kier Living since December 2019, as Sky News reported at the time that it had bid for less than £ 150m.