Carillion covenant test delayed to April
Debt‑laden construction giant Carillion has struck an agree‑ ment with its lenders to delay a key financial covenant test, giving it some breathing space
The company, whose shares have plunged following serial profits warnings as it scram‑ bles to reduce an estimated £900 million debt mountain, said yesterday that the test date had been moved from 31 December 2017 to end‑april 2018.
Scots‑born interim chief executive Keith Cochrane said: “We believe that our lenders’ decision to defer the test date demonstrates their continu‑ ing support.
“We remain focused on actively progressing a con‑ structive dialogue with our financial stakeholders on the group’s recapitalisation plans.”
The company’s Scottish work includes a £23m con‑ tract to extend several plat‑ forms at Edinburgh’s Waver‑ ley railway station. Carillion is is also a contractor on the High Speed 2 (HS2) rail project to run initially between London and Birmingham, and then on to Manchester and Leeds. In November, the company issued its latest profit warning and revealed it would breach its debt covenants.
Carillion said at the time that annual profits were set to be “materially lower than cur‑ rent market expectations” as it grappled with project delays and smaller‑than‑expected improvements to profit mar‑ gins on certain contracts.
Earlier this week, the group announced that it was bring‑ ing forward the start date of new chief executive Andrew Davies to 22 January next year from 2 April.