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Carillion to unveil rescue plan to lenders this week

Troubled contractor Carillion will unveil a rescue plan to its lenders this week demonstrating how it can secure extra funds to shore up its position.

The company confirmed its management would present to stakeholders on Wednesday outlining plans to reduce debt and secure new funding.

A Carillion spokeswoman said: “The group is currently finalising its business plan, which it intends to present to its creditors on Wednesday.

“Once finalised, the business plan will provide the basis for the agreement of a proposal to restore Carillion’s balance sheet.”

The firm has issued three profit warnings since July, has current net debt estimated at around £900m and is also grappling with a pension deficit of £587m.

Last week Carillion’s woes increased with the announcement that the firm was under investigation by the Financial Conduct Authority over trading updates sent between December 2016 and July 2017.

A Sky News report over the weekend claimed the firm had just weeks to secure new funding or risk collapse.

The report suggested many of its lenders were reluctant to provide new money, and that part of Carillion’s plan involved the handing back of loss-making contracts and revising the terms of others.

It was also reported that senior figures close to Carillion had discussed the possibility of emergency financial support from the government.

The news comes just weeks before former Wates boss Andrew Davies is set to take over the firm on 22 January.

Carillion currently holds a number of key contracts for government clients including HS2, the Education and Skills Funding Agency, and the Ministry of Defence, and is regarded as one of the government’s 29 strategic suppliers.

Construction News revealed today that Carillion’s crown representative, a key role managing the relationship between the firm and Whitehall, had been left vacant for months despite the contractor’s financial woes.

Carillion’s share price rose as high as 21.70p today, up more than 12 per cent from its 19.29p closing position on Friday last week.

Have you been affected by Carillion’s recent troubles? We want to hear from you: lucy.alderson@emap.com

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