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Debt-laden Carillion agrees new credit facilities

Published 24/10/2017, 07:47
© Reuters. A Carillion sign can be seen in Manchester
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(Reuters) - Carillion (L:CLLN), the debt-laden construction and services group that has issued two profit warnings this year, said it had agreed new credit facilities and deferrals on some debt repayments.

The group said it had agreed to two facilities totalling 140 million pounds and deferrals on certain pension contributions, and on the repayment of private placement notes due in November and September 2018.

Together these would raise the total amount of undrawn credit that it has in 2018 by between 170 million pounds and 190 million, Carillion said, adding that it continued to assess a range of options to improve its capital structure and was in talks with investors.

Analysts expect Carillion to have to raise new funds to shore up its balance sheet, although uncertainty over its contracts, its debts and its pensions obligations have raised questions over the value of the company.

Carillion's troubles first came to light in July, when it booked an 845 million pound writedown on problematic construction contracts, prompting the departure of its chief executive and wiping nearly two-thirds off its stock market value.

Last month the group said it had decided to exit its UK healthcare and Canadian businesses, as it warned on profit for the second time and said it may need to sell shares to shore up its balance sheet.

© Reuters. A Carillion sign can be seen in Manchester

Carillion also said on Tuesday it had signed a head-of-terms agreement to sell a large part of its UK healthcare business to outsourcing company Serco Group (L:SRP) for 50.1 million pounds.

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