G4S $135m division sale frees it from Guantanamo Bay duties

G4S, the world's biggest security company, is to withdraw from the controversial Guantanamo Bay Naval Base after agreeing a $135m sale of its US Government Solutions division.

The division had been on the market for more than a year, and recently won a £70m five-year contract to run facilities at the US base and prison camp, which houses more than 100 terrorism suspects. G4S had decided to put the division up for sale because the US government had prohibited it from having any control or influence over its US activities, on the grounds that the parent group was non-American. In past years, this US division secured a number of sensitive contracts with US government departments, including the provision of mine clearance services.

However, G4S said its restricted security clearance as a UK company made it harder to manage the US business. Under the terms of the sale, to an undisclosed buyer, G4S will receive cash proceeds of $80m and $55m still owed to it by customers.

The deal is the latest in a series of disposals as chief executive Ashley Almanza works to salvage the security company's reputation. Earlier this year, G4S announced that it would stop supplying Israeli prisons, including those in the occupied territories, by 2016.

G4S has been under fire during the past two years for issues including taking a £70m hit for botching the supply of security guards to the 2012 Olympics and then losing British government work after overcharging on the electronic tagging of criminal offenders.

But the company said in a trading update on Wednesday that contract retention rates had returned to historical levels of more than 90 per cent and that there was £5.1bn of new business in the pipeline.

Later in the day, however, the company became the target of an internet scam, in which a fake G4S website and emails purporting to be from the group suggested it would have to restate its 2013 accounts.

In its genuine update to the market, the company had reported new contracts - including those for clear landmines in South Sudan and in Iraq - with a total value of £1.7bn.

G4S, which remains the world's biggest security group by sales, said organic revenue growth, compared with the same nine-month period last year, was up by 4.2 per cent.

Mr Almanza said: "We are executing a clear and focused strategy which is delivering tangible benefits. Our trading performance in 2014 and the ongoing implementation of our performance improvement plans are expected to provide good momentum for the group in 2015."

Stephen Rawlinson, analyst at Whitman Howard, said he remained very positive. "G4S is now starting to lift its head above the parapet in our view and talk more positively about what has been achieved recently. Cost savings and efficiency improvements will make a strong contribution this year and in the mid term."

G4S's recovery contrasts with rival Serco, also tarnished by the electronic tagging scandal. Its shares fell by a third on Monday after the operator of privatised public services put out profit warnings for 2014 and 2015 and said that it would take writedowns in its value and provisions against losses of £1.5bn.

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