HSBC drafted in to halt Carillion freefall

Embattled construction and infrastructure giant Carillion has drafted in HSBC as an adviser as it continues to reel from a dramatic collapse in its share price.
By The Newsroom
Published 14th Jul 2017, 13:04 BST
Updated 18th Jul 2017, 08:39 BST
The City of London skyline at dusk Photo: Jonathan Brady/PA WireThe City of London skyline at dusk Photo: Jonathan Brady/PA Wire
The City of London skyline at dusk Photo: Jonathan Brady/PA Wire

HSBC has been appointed joint financial adviser and corporate broker with immediate effect and will work alongside Morgan Stanley, Lazard and Stifel.

Carillion is carrying out a “comprehensive review”, which was announced earlier this week alongside a profit warning that saw almost £600m wiped from its stock market value.

Shares were up over 5 per cent on the news at 58.5p.

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Carillion’s market capitalisation has gone into freefall, falling from £826m to around £240m in a matter of days after it warned over earnings and revealed an £845m write-off on construction contracts.

Chief executive Richard Howson stepped down with immediate effect on Monday as the group said it would need to bolster its balance sheet and was struggling to stay within its borrowing limits.

He has been replaced by Keith Cochrane on an interim basis while a search is undertaken for a permanent boss.

Analysts at UBS warned on Tuesday that shares could even plummet to zero if Carillion’s support services trading is hit, while other experts raised worries the group may not have the funds to restructure.

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