Troubled Carillion lines up administrator amid rescue talks

Postado Janeiro 13, 2018

Troubled construction firm Carillion has denied reports lenders rejected a proposed rescue plan for the business.

Carillion has a pension deficit, it said, of around GBP580.0 million.

The government, the Pensions Regulator and representatives from the firm held crunch talks to discuss the firm's options on Friday.

Carillion is a major supplier to the Government and key contractor in the first phase of building the £56 billion HS2 rail line, but has seen its share price plunge almost 80% in the past six months after making a string of profit warnings and breaching its financial covenants.

A government spokesperson said: "We can confirm that a ministerial meeting took place yesterday, 11 January".

Laith Khalaf, a senior analyst at Hargreaves Lansdown, said it was likely the Scottish and UK Governments had been working on contingency plans since financial difficulties at Carillion first became clear past year.

In addition to its rail operations, Carillion also manages almost 900 schools, provides services to the NHS and works with National Grid.

The firm is now under investigation by the Financial Conduct Authority over the "timeliness and content of announcements" made between December 2016 and July 2017.

The reported that David Lidington, who was moved to the Cabinet Office as part of Prime Minister Theresa May's reshuffle this week, convened the meeting with Business Secretary Greg Clark, new Justice Minister Rory Stewart, new Transport Minister Jo Johnson and Liz Truss, Chief Secretary to the Treasury.

The firm, which is one of the government's biggest contractors, is struggling under £1.5bn of debt, including a pension shortfall of £587m.

The company is a major supplier to the Government, maintaining prisons across the country and managing around 900 schools.

The company is fighting net debts of more than £900 million, following a crisis sparked in July previous year when it issued a profit warning.

Carillion, which has had to contend with a slowdown in many of its major markets, has seen its share price plummet from 230p a year ago to less than 15p on Friday.

The company has been working on a plan which it said "will provide the basis for the agreement of a proposal to restore Carillion's balance sheet".

A Scottish Government spokesman said: "We continue to liaise with UK Government colleagues to monitor and mitigate service risks associated with Carillion's financial situation and stand ready to offer what assistance we can at this anxious time for the company's employees and their families".

Carillion is holding crisis talks with United Kingdom government representatives on Friday, which Sky News said were aimed at safeguarding the more than 28,000 pension scheme members who face potential cuts to retirement payments should Carillion fail. "It would be inappropriate for us to comment on any individual contractor's internal financial governance".