Credit deal offers respite for under siege Carillion

Under siege Carillion has offered investors some positive news after agreeing new committed credit facilities.

The Wolverhampton company, which has endured the summer from hell after a dire profits warning, said last month that it had agreed a £140m credit facility with five of its core lenders.

In an announcement today, the group said it had signed two further committed facilities, totalling £140m. This additional liquidity is fully available to draw down now. It comprises a £40m senior secured revolving facility maturing on April 27, 2018, secured over shares in certain of the group’s subsidiaries and over certain of its assets, and a £100m senior unsecured revolving facility maturing on January 1, 2019.

In addition, the group has agreed new committed bonding facilities, together with the deferral of certain pension contributions and the deferral of repayment of private placement notes due in November 2017 and September 2018.

When taken together, Carillion said the new facilities and agreed deferrals improved its committed headroom throughout 2018 by between approximately £170m and £190m.

It said it continued to assess a broad range of options for optimising its capital structure and to this end was “fully engaged in constructive dialogue with stakeholders”.

The group has also revealed more details on the healthcare deal it pre-empted last week.

It said it had signed heads of terms with Serco for the disposal of a large part of its UK healthcare facilities management business for an agreed price of £50.1m, subject to a limited working capital adjustment.

Carillion has agreed to give Serco a period of exclusivity to provide the parties time to finalise a business purchase agreement, which Carillion and Serco are aiming to sign in the next few weeks.

The transfers of contracts pursuant to the disposal are each subject to receipt of third party consents, and, if required, shareholder approval.

Carillion said it intended the contract transfers would take place on a phased basis – with the bulk of the proceeds being received during the first half of 2018.

It said further details would be published once the business purchase agreement had been signed.

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