Carillion calls in EY for help

Xavier Trudeau
Juillet 17, 2017

The Wolverhampton-based giant has hired EY after last week issuing a major profit warning after revealing a writedown of £845m related to three problem contracts.

LONDON-Carillion PLC's (CLLN.LN) joint venture partnership with Eiffage and Kier Group PLC (KIE.LN), have been awarded 2 High Speed 2 contracts worth 1.4 billion pounds ($1.80 billion).

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.

Better day on the cards for Carillion? EY hired for strategic review
Carillion calls in EY for help

A number of actions have been identified to reduce average net borrowing including further cost efficiencies, an increased focus on managing working capital and on recoveries and cash collection.

Carillion interim chief executive Keith Cochrane said: "Alongside our own efforts, EY will provide support across the business and bring an external perspective to our cost reduction and cash collection challenge". My priorities are to reduce the group's net debt and create a balance sheet that will support Carillion going forward. Lot C3 of the contract is for Brackley to Long Itchington Wood Green Tunnel South Portal and its worth GBP616 million.

The tunnels are expected to take between four and five years to complete.

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