Carillion has sold its majority stake in Manchester-based property developer Ask for £13.8m as the troubled contractor looks to pay down more debt.
The Wolverhampton-based company, which appointed Wates boss Andrew Davies as its new chief executive last week, has sold its 66.67 per cent stake in Ask Real Estate and its 50 per cent stake in Ask Carillion Developments to property developer Dukehill.
It is the second disposal agreed by Carillion in the space of a week, after it announced the sale of its UK healthcare unit to Serco for £50m as part of a bid to strengthen its ailing balance sheet.
The disposal of Ask comes less than two years after Carillion acquired a majority stake in the firm as it then looked to strengthen its presence in the north of England.
However, Carillion is undergoing a major turnaround effort after revealing a £845m writedown on problem contracts in July, prompting a profit warning and chief executive Richard Howson to step down. Last month it reported a half-year loss of £1.15bn.
Interim chief executive Keith Cochrane said today: “We are pleased to be able to announce further progress.
“Much remains to be done, and we are continuing to execute our plans to refocus the business, reduce cost and strengthen our balance sheet.”
In an update last month, Mr Cochrane said he expected the turnaround effort to take up to five years. He also admitted to Construction News he was “bemused” by the risk and reward ratio for construction firms.
Carillion is banking on Mr Davies to lead the rescue effort after last week appointing him as its new chief executive. He will take up his new role next April.
Shares in Carillion rose 2 per cent to 47p in mid-morning trading.