Invensys at 20-year low on bank fears

ELECTRICAL engineer Invensys plunged to a 20-year low amid fears that it will breach banking agreements next year.

At 14 1/2p, down 1 3/4p at the close on Monday, the shares have fallen 60% since the profits warning on February 14.

The former BTR-Siebe warned of a steep slump in the half to March. The shares were £4 a year ago. New chief executive Rick Haythornthwaite took over last summer and has speeded up disposals to raise cash.

Invensys says it remains 'confident' that it will meet commitments. To avoid breaching covenants, March 2004 trading profits must be at least 3.5 times interest bills. Its broker Merrill Lynch predicts £100m interest and £355m trading profits next year.

That forecast depends on Baan, the troubled software division, breaking even from October. It is presently losing £500,000 a month.

Rating agency Standard & Poor's sees a 'significant chance' of another downgrade.