Carillion to discuss rescue with creditors

LONDON: Struggling British building and services company Carillion, which is involved in Britain’s planned high-speed rail link HS2, said on Saturday it would meet creditors on Wednesday as it seeks a financial rescue plan.

Carillion, a provider of infrastructure projects in several countries beyond Britain, has been fighting for its survival after costly contract delays and a downturn in new business.

It is also under investigation by regulators over ”the timeliness and content” of statements it made before it issued a profit warning in July, the first of three such warnings issued in quick succession.

“The group is currently finalising its business plan, which it intends to present to its financial creditors and certain other stakeholders on Jan 10, in line with the previously announced timetable,” a company spokesman said.

Carillion was in talks to “reduce net debt and recapitalise and/or restructure the group’s balance sheet,” he said. “Once finalised, the business plan will provide the basis for the agreement of a proposal to restore Carillion’s balance sheet,” the spokesman said.

Earlier on Saturday, Sky News said Carillion’s rescue plan would involve handing back loss-making contracts, revising the terms of others and possibly accepting government financial support if it cannot secure private funding.

That government support could be a loan on commercial terms, a deal to reprice some contracts, or to allow Carillion to hand back loss-making work to the government, Sky News said, quoting unidentified sources.

Analysts have estimated the company has debt including provisions, pensions and accounts payable of about £1.5bil (US$2.04bil) compared with its market capitalisation of about £70mil, according to Thomson Reuters data. — Reuters