Carillion insists lender business plan has not been rejected

Oliver Gill
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Carillion presented a turnaround plan to its banking syndicate on Wednesday (Source: Getty)

Carillion this evening dismissed reports lenders have rejected a critical restructuring plan.

The troubled contractor said it "continues to engage in constructive discussions with a range of financial and other stakeholders regarding options".

"Suggestions that Carillion’s business plan has been rejected by stakeholders are incorrect," the firm said in a statement.

Hours earlier, the Press Association reported Carillion's banks had not received "a solid proposition".

The announcement comes after Carillion's stock market valuation hit fresh lows today amid reports the ailing contractor had lined up administrators.

Shares dived this lunchtime to as little as 12.97p – valuing the company at just £55.8m – after it was reported EY had been selected by Carillion's directors to be on standby for an administration.

The accountancy giant pipped big four rival PwC to the selection, Sky News reported.

Carillion shares made modest gains subsequently, currently worth just under 15p each.

EY partner Lee Watson is currently on secondment to Carillion acting as a director and the firm's chief transformation officer. Sources at the accountancy giant said his position – and EY's role as company financial adviser – would not conflict it from taking an appointment as administrator.

The selection of EY does not mean it will ultimately be called into action to take charge of an insolvency.

Both EY and PwC declined to comment.

Read more: Revealed: Behind the scenes of Carillion's annus horribilis

The share price fall will come as no surprise to City analysts, many of whom have already written off the equity value of the contractor, which employs almost 50,000 people worldwide.

Carillion is facing a £300m shortfall in funding and met banks on Wednesday to present a business plan, outlining its turnaround pathway.

Yesterday, government officials met to consider the company's precarious position, while today pension trustees and regulators convened to discuss the firm's £587m pension shortfall.

Meanwhile, unions have rounded on the government, demanding it acts in the event of Carillion's failure.

Earlier today the Rail, Maritime and Transport (RMT) union said Carillion workers – many of whom are working on critical upgrades to Britain's rail network – should be transferred to government-backed Network Rail in the event of a corporate failure of the Wolverhampton-based firm.

Yesterday, Unite, which represents more than 1,000 workers at Carillion, urged the government to "consider all possible options", including bringing its contracts – which also include the likes of BT's broadband infrastructure upgrade – back "in-house".

Read more: Carillion’s banks were left on the sidelines while shares plummeted

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