Torygraph in November
19 November 2017 • 7:45pm
Around 28,000 pensioners who used to work at Carillion could end up owning a stake in the construction company under plans to keep it afloat.
The outsourcer, which is now worth just a tenth of what it was a year ago, wa
rned last week that it expects to breach covenants by the end of this year following delays to asset sales and cost-cutting efforts.
Carillion’s shares tanked by as much as 64pc on Friday as investors reeled at a third profit warning in just four months.
Analysts now expect a recapitalisation of the business, which is working on the HS2 rail link, is inevitable with a highly dilutive debt for equity swap considered to be the most likely option.
Carillion has said that “some form of recapitalisation” which could include a restructuring of the balance sheet, will take place during the first quarter of next year.
The company’s debt pile is forecast to swell to £925m, compared to its shrunken market value of just £107m.
Meanwhile, its pension deficit is also
estimated to grow to £800m from its £587m in June.
Earlier this year Carillion’s pension trustees were understood to favour a rights issue as a way of shoring up the retirement scheme. But the stricken company’s share price fall has now made that unlikely.