Jul 14, 2017

Carillion turns to HSBC to help repair finances

Carillion has hired HSBC as joint adviser and broker after a shock profit warning this week prompted a steep fall in the UK construction company's share price. HSBC is a longstanding member of Carillion's banking group, which comprises the construction company's debt in the form of bonds and a revolving credit facility. Shares in Carillion jumped as much as 11 per cent on Friday morning after the announcement, following a turbulent week in which its share price has more than halved. Joe Brent, an analyst at Liberum, said Carillion would need to raise a "Significant amount" of money given the weaker profit, higher debt, the need to restructure and the limited proceeds from disposals. Carillion, which has had a reputation for late payments to suppliers, took the decision a few years ago to extend payment terms to 120 days, nearly doubling its previous timeframe.

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