One of Britain’s biggest privately-owned firms is in a race against time to secure a multi-million pound rescue package.
Laing O’Rourke, which counts building the Hinkley Point C nuclear power station among a string of other high-profile infrastructure projects, yesterday filed accounts five months late.
After racking up £246m of pre-tax losses in 2016, Laing O’Rourke remained in the red during the 12 months to March 2017, posting a £67m loss before tax.
Later last year, the contractor – which employs 15,000 people in the UK – was forced back to the negotiating table to thrash out a deal with lenders led by HSBC. Laing O'Rourke was due to repay £125m in October 2017. But it appealed to banks to waive covenant testing amid concerns it would breach arrangements put in place little over a year earlier.
And two weeks ago the firm secured £13.7m of extra bank support, which was coupled with a £15m standby shareholder loan facility.
The repayment of core lending has now been delayed until April 2019 as Laing O’Rourke attempts to finalise terms with lenders for their long-term support.
“The group has initiated refinancing discussions to meeting its current obligations and based on current discussions the board expect to complete the refinancing exercise by June 2018,” it said.
£113m legal battle
Meanwhile, Laing O’Rourke’s 2017 losses assume it can recoup £113m from a long-running legal battle with Japanese conglomerate Kawasaki Heavy Industries. PwC, whose role in the failure of rival contractor Carillion has been put under the spotlight in recent weeks, flagged the recoverability of this balance.
PwC’s audit report read under a special “emphasis of matter” subtitle:
This amount remains subject to dispute resolution and/or private arbitration, the outcome of which is uncertain.
Boss Ray O’Rourke admitted the firm had faced a “difficult time”, thanking stakeholders including lenders while the firm goes through “significant transformation”.
Details of Laing O’Rourke finances come as the firm is reportedly in pole position to take over one of Carillion’s building contracts.
Representatives from the £335m Royal Liverpool Hospital yesterday said talks with a new contractor were “at a very advanced stage”. Both Royal Liverpool and Laing O’Rourke declined to comment further.
HSBC declined to comment.