Troubled construction giant Carillion could be about to have a significantly better week, after it said it had enlisted EY to undertake a strategic review of its business.
Shares in Carillion plunged more than 70 per cent at one point last week, wiping almost £600m off its market cap, after it said on Monday it expected to take £845m of writedowns on some of its largest projects.
But it looks like today will be better: not only was Carillion named among those awarded £6.6bn of government contracts to build HS2, but the company said EY will support its strategic review, with a particular focus on cost reduction and cash collection.
Investors seemed mollified: shares were up more than six per cent, at 59.6p, as the market opened.
Last Monday its board said it will review its business and capital structure, as well as coming up with plans to generate short-term cashflow and cut down on borrowing.
Today it said the board has identified a number of actions to reduce average borrowing, including cost-cutting, an increased focus on managing working capital and finding ways to recover cash it's owed.
Analysts have suggested Carillion will be forced into a rights issue of as much as £500m.
Some £800m of bank debt is due to mature in 2020, according to last year's financial statements. On Friday shares began to rise after it said it had hired HSBC as a joint financial adviser and broker.
Read more: In numbers: Carillion's woeful week