Banks draft in specialists to protect Carillion investments

A consortium of UK banks has appointed specialist consultants to help them unpick problems at troubled property supports services group, Carillion.

Shares in the Wolverhampton firm collapsed when it issued a dire profit warning in July. The fallout saw chief executive Richard Howson fall on his sword and the business relegated from the FTSE 250.

Reports over the weekend said banks including Barclays, HSBC and Royal Bank of Scotland had appointed specialists to advise them ahead of a financial restructuring of the troubled business.

Sky News said the banks had recruited FTI Consulting to ensure their investments were being protected.

The Wolverhampton company endured the week from hell in July after seeing around 70% wiped off the market value of its business after it issued the dramatic profit warning.

The slump in the firm’s fortunes has seen the value of its shares continue to fall and its market cap has been reduced to less than £186m.

There is fresh speculation that the company may have to issue a discounts rights offer in an attempt to secure the funds it will need to take the business forward.

In the wake of the profit warning, the company announced an exit from all construction PPP projects as well as a withdrawal from construction markets in Qatar, Saudi Arabia and Egypt.

In future, it has said it will only be undertaking construction work on a highly selective basis and via lower-risk procurement routes.

It has secured two contract wins through joint venture initiatives since the crash.

The first, with the Defence Infrastructure Organisation (DIO), has a core value of £158m over five years, with the potential to double its value.

The other is an agreement with its CEK JV, which has been named as the successful bidder for two HS2 contracts worth a total of £1.34bn.

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