Invensys offloads Baan

Ailing British engineering firm Invensys has sold Baan, its Dutch software business, as part of an effort to shore up its finances.

Invensys said it had sold Baan to two US private equity firms, Cerberus Capital management and General Atlantic, for $135m (£81m; 108m euros).

The British engineering giant paid 762m euros ($1bn) for Baan in August 2000, when investor confidence in information technology markets was still riding high.

Invensys' chief executive Rick Haythornthwaite said the Baan deal marked "a rapid and positive start" to a disposal programme aimed at refocusing the company on its core production management and rail systems operations.

The sell-off programme, unveiled in April, is expected to halve Invensys in size, and raise about £1.8bn in urgently-needed cash.

The company, struggling in the face of a protracted downturn in its key markets, has run up debts of about £1.6bn, and is also facing a pension fund deficit of nearly £1bn.

Invensys, which lost its place in the elite FTSE 100 share index in March, crashed to a pre-tax loss of £1.4bn in its most recent financial year after slashing the book value of its assets.

Baan's new owners are expected to merge the company with rival software firm SSA Global Technologies.

Invensys shares lost 0.5 pence to close at 18p.