Carillion granted breathing space to secure its financial position

Carillion has been granted more time to get itself back on its feet after its truly awful year.

The Wolverhampton company said last month that it was looking to defer the testing of its financial covenants until April 30 next year, by which time it hoped it would be more secure after a series of profit warnings saw its share price plunge.

In the period since November 17 it has been in talks with financial stakeholders but it has now been given the consents necessary to amend the relevant agreements in order to defer the test date for both its financial covenants from December 31, 2017 to April 30, 2018.

Accordingly, the deferral of the financial covenants has become effective.

Carillion said it was also in continuing constructive discussions with stakeholders regarding its options to reduce net debt and recapitalise and/or restructure the group’s balance sheet.

It said these discussions were progressing well, and the board was still expecting to begin steps to implement the chosen option during the first quarter of 2018.

Keith Cochrane, Carillion’s Interim Chief Executive, said: “We believe that our lenders’ decision to defer the test date demonstrates their continuing support.  We remain focused on actively progressing a constructive dialogue with our financial stakeholders on the Group’s recapitalisation plans.”