Ex-Centrica Chief Gardner To Chair Serco

Sir Roy Gardner, the former chief executive of Centrica, is to take on the challenge of chairing Serco, the outsourcing group.

Sky News has learnt that Sir Roy, whose most recent FTSE-100 chairmanship was at Compass, the catering giant, could be announced by Serco as soon as this week.

He will take over from Alastair Lyons, who announced he would step down from the troubled government contractor following a string of operational and financial mishaps.

Sir Roy, whose current boardroom roles include a non-executive directorship at William Hill, also served on the board of Manchester United during its time as a London-listed company.

His experience is likely to be valuable to Serco and its chief executive, Rupert Soames, who was parachuted in last year amid fears for the company's survival.

Serco became embroiled in crisis over its handling of UK public sector contracts, and has seen its shares slump by more than 50% during the last year, leaving the company with a market value of just £1.5bn.

Sky News revealed last week that the company is closing in on its biggest disposal since Mr Soames's arrival with the sale of Intelenet, an Indian business process outsourcing operation.

The likely buyer of the business is SPI Global, a Philippines-based peer which is owned by the buyout firm CVC Capital Partners.

Blackstone, Intelenet's former owner, also tabled an offer to buy the company and is understood to remain keen on a deal.

Intelenet, which provides back office services to companies in the financial services, healthcare, telecoms and travel sectors, is expected by analysts to be worth around $400m (£257m).

The progress towards a sale is likely to relieve Serco investors, who have had to endure a torrid time as the company's shares have been battered by a string of profit warnings, fraud inquiries and, more recently, a rescue rights issue.

Last month, the company said it had raised £555m from the share sale, which Mr Soames said had "delivered a much stronger balance sheet and therefore an appropriate foundation on which to implement our new strategy".

"Our focus now is to walk the path to recovery and repay the confidence and support shown to us by our shareholders and lenders," he said.

Mr Soames, the grandson of Sir Winston Churchill, believes the company's future lies as a focused supplier of services to governments in areas such as justice and immigration, defence, transport, citizen services and healthcare.

Last year's profit alerts were the latest in a string of problems for Serco, which had been hit by a ban on winning new Government contracts after it emerged that some work monitoring prisoners had been billed for erroneously.

Serco eventually agreed to repay tens of millions of pounds to the Government after intense pressure.

Serco could not be reached for comment on Sir Roy's appointment.