Corporate Services Group, owner of the recruitment brand Blue Arrow, has reached an agreement to sell its debt-ridden French subsidiary, Euristt for £77m.

The French recruitment organisation Groupe CRIT is seeking approval from its shareholders to buy Euristt, which has accumulated net debts of £36.9m.

CSG believes it does not have the financial muscle to bankroll Euristt’s expansion in France and mainland Europe, where its market share of the temporary recruitment market is significantly smaller than its rivals.

Euristt is the holding company that owns all of CSG’s French operations, formed from its acquisition of the French temporary employment groups Inter Participations SA, Inter Alsace SA, Locamet SA, Interim 25 SA, and Sonatec SA.

It is the fourth largest temporary staffing group in France, supplying primarily to the industrial sector – its 160 branches give it a market share of 4%.

If the sale goes ahead, CSG’s group debts will drop from £164.9m as at June 2001 to £60m.

Groupe CRIT is a French temporary employment services group listed on Euronext Paris with a market capitalisation of £82.6m and a turnover of £221.4m.

CSG chairman Michael Davies said: 'We are pleased to have successfully concluded our negotiations for the sale of Euristt. While Euristt is a strong business which has delivered above market growth rates, the proceeds will improve the financial strength of the group and allow it to operate more effectively in its UK and US markets.'

CSG admitted that the downturn had affected its performance in recent months, with sales for the two months ending 31 August 2001 10% down on the same period last year.

A statement said that sales in France remained strong but were offset by poorer performances in the UK and the US. CSG is implementing measures to further reduce costs.