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Shares crash in construction firm

Government offers support to troubled Carillion

Keith CochraneThe government has offered support to troubled construction company Carillion which today issued another profit warning.

Despite its financial difficulties Carillion recently added to the government contracts it holds, including a share in the HS2 project.

Shares tumbled by up to 60% today and closed down 46.4% or 19.25p at 22.5p as the company said it expected to breach covenants with lenders and it would need to recapitalise.

The company lost a fifth of its value at the end of September after it unveiled a £1.15 billion loss. 

Interim chief executive Keith Cochrane (pictured) said at the time:  “No-one is in any doubt of the challenge that lies ahead.”

The company employs more than 30,000 people and oversees high-profile infrastructure projects and this morning said it must defer the test date for meeting the covenants until 30 April next year.

“This will require some form of recapitalisation, which could involve a restructuring of the balance sheet. The Board expects to commence steps to implement the chosen option during the first quarter of 2018 and a further announcement will be made in due course,” it said.

In response to the crisis, the government today issued a statement which said: “Carillion is a major supplier to the government with a number of long-term contracts.

“The company has kept us informed of the steps it is taking to restructure the business. “We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress.”

 



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