Home » Money

Carillion plunges on reports lenders have rejected its debt restructuring plan

14 January, 2018, 00:27 | Author: Melinda Barton
  • A Carillion sign o the edge of a construction site

Administration would put at risk the jobs "at least some" of the 19,500 people employed by the firm, Sky News said.

A spokeswoman said: "It is too early to predict the outcome of these discussions but Carillion expects that any such agreement is likely to involve the raising of new capital and the conversion of existing financial indebtedness to equity which would result in significant dilution to existing shareholders".

Its last annual report said there were 28,500 members of various defined benefit pension schemes.

They added: "Based on our current trading assumptions (Dec' 18 EBITDA £188m with material downside risk) and our estimates of the mounting debt ( £1.1bn), likely additional supply chain funding/working capital unwind ( £300m) and pension liabilities (£600m), we now see no equity value".

The UK Government said a ministerial meeting to discuss the crisis took place on Thursday, with a spokeswoman adding: "We are carefully monitoring the situation while working to ensure our contingency plans are robust".

"As part of its engagement with stakeholders, Carillion is in constructive dialogue in relation to additional short term financing while the longer term discussions are continuing".

"We will not comment further unless it becomes appropriate to do so".

To date, numerous banks have indicated that they are reluctant to provide additional funding given the potential for huge losses on their existing exposure.

The Government is notoriously slow at settling bills with contractors, and frequent delays have exacerbated Carillion's cash crunch.

Its only asset sale since the crisis erupted has been to offload a portfolio of healthcare contracts to rival outsourcer Serco for £50m - against a broader forecast for disposal proceeds of £300m.

The scale of the meeting reflects the huge implications that the collapse of Carillion, one of the government's biggest contractors, would have on the United Kingdom economy and wider public services.

Although the company has refused to name the trio of bungled contracts, problems with building the £350m Midland Metropolitan Hospital in Smethwick, expensive delays constructing the £335m Royal Liverpool Hospital and a £550m stretch of the Aberdeen bypass, top the list. It maintains 50,000 homes for the Ministry of Defence, manages almost 900 schools and is heavily involved in the highways and prisons.

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

Mr Howson was replaced on an interim basis by Keith Cochrane, the former Weir Group boss, with Andrew Davies due to arrive from Wates Group as his permanent successor on 22 January.

"We are committed to maintaining a healthy supplier market and work closely with our key suppliers".

Carillion also declined to comment on the reports.

"We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress".



US Spy Satellite Believed Lost After SpaceX Mission Fails
Falcon Heavy is created to take heavier payloads to higher orbits, opening SpaceX's manifest to new capabilities. This was SpaceX' s third classified mission for the USA government, a lucrative customer.

New tax law won't affect 2017 filing season
The Treasury Department released new withholding tables that ensure many Americans will see higher pay checks. The GAO is reviewing Wyden and Neal's request , agency spokesman Charles Young said in a January 11 email.

Canada Goes Toe-to-Toe With US Trade Policy
Indeed, the Trump administration wasted no time expressing its displeasure. "This has been a chronic problem for us", he said. The U.S. imports about $1.6 billion a year in Canadian newsprint.

Men steal cash register at gunpoint from Salisbury store
Anyone with information regarding this incident is asked to contact the Maryland State Police Salisbury Barrack at 410-749-3101. They drove the vehicle to the 3100 block of North Keating, where they committed an armed robbery, police said.

Ronaldo, Messi, de Bruyne named in Year 2017 UEFA Team
Interestingly, Ronaldo was the only player to make it to the team from the top 10 most expensive players of all time. Sergio Ramos received the most votes with 588,315, and is one of five Real Madrid players named in the side.

Japan's central bank maintains bond purchases after earlier jolt, JGBs bounce
Brent crude futures traded at $69.03 a barrel, down 17 cents, after rising as high as $69.37 on Wednesday, highest since May 2015. Its session high of $US1,326.56 was its highest since September 15.

QB Jacob Eason announces he's leaving Georgia
He added: "You could be mad about it, you could sulk about it all season, but I took what happened and did what I could with it". True freshman Jake Fromm entered and didn't surrender the starting position the remainder of the season.

Women Accuse James Franco of Sexually Inappropriate Behavior
Seth grilled him about actress Ally Sheedy , 55, who made cryptic tweets about him during the Globes ceremony on January 8. Another woman, Violet Paley , says Franco pressured her into performing oral sex on him while sitting in her auto in 2016.

OJ Simpson Shut Downs Rumors About Being Khloe Kardashian's Father
In 2012, gossip sites said a photo of Khloe Kardashian with family hair dresser Alex Roldan proved he was her father. The cameraman then highlighted that Khloé was pregnant her first child, implying he was going to be a grandfather.

Harvey Weinstein Slapped at Resort in Scottsdale
Weinstein has further confirmed that there were never any acts of retaliation against any women for refusing his advances. Weinstein is under investigation by authorities in New York, Los Angeles, Beverly Hills and London.