LONDON: Troubled British construction firm Carillion said on Wednesday it had reached a deal to sell a large part of its UK healthcare facilities management business to outsourcing group Serco, helping it cut its debt by £641.4 million. The company’s shares, which have slumped more than 90 per cent since a profit warning in July, rose as much at 10 per cent in early trade on Wednesday. They traded at 18 pence at 0813 GMT.
Carillion, which has said it was heading towards a breach of debt covenants and needed fresh capital, had said it would exit its UK healthcare and Canadian businesses to help raise more than £6300 million by the end of 2018 from disposals.
The sale, for about £47.7 million ($63.55 million), includes a portfolio of healthcare facilities management contracts and related ancillary contracts and assets.
The firm said 15 sites would be transferred to Serco on a phased basis. The firm had said in September said it intended to exit the business and then announced it had a preliminary agreement for selling a large part of it to Serco for £50.1 million.
Carillion said net disposal proceeds of £41.4 million would be used to pre-pay of part of a £140 million credit.
“I am pleased we have been able to successfully conclude this transaction which will contribute to our efforts to reduce net debt,” Carillion’s Interim CEO Keith Cochrane said.
Analysts estimate Carillion’s debts including provisions, pensions and accounts payable at about £1.5 billion.
Carillion is fighting for its survival after costly contract delays and a downturn in new business at the company, which handles major infrastructure projects for the British and other governments.
— Reuters
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