nsucurrent.com May 21, 2018

Carillion: What is the government doing to help SMEs?

19 January 2018, 02:46 | Ruby West

Construction takes place on the Western Peripheral Route in Aberdeen Scotland Britain

Construction takes place on the Western Peripheral Route in Aberdeen Scotland Britain

Britain's government is under pressure from opposition parties to explain why ministers awarded construction company Carillion 1.3 billion pounds ($1.8 billion) of new contracts after it was known to be in financial difficulty.

Sheila Thomson, director of services at Perennial said: "The collapse of Carillion will affect a large number of small sub-contracted businesses, many of which were pro-actively encouraged by the government to get involved in these public sector contracts".

It is created to support the working capital needs of small businesses within Carillion's supply chain that may now be experiencing financial difficulty.

After Carillion's demise, Interserve is now the cheapest stock in the outsourcing sector, with the shares having fallen 76% in the last two years, and debt of around three times its earnings.

Interserve's shares plunged by more than 14 per cent on Wednesday morning, but recovered to being four per cent down at midday.

Interserve, which employs around 80,000 people worldwide, said it was updating the government on the company's progress with its turnaround plan.

Cabinet Office minister David Lidington defended the government's handling of the company.

United Kingdom construction and services company Carillion, which is involved in six projects in Ireland, collapsed on Monday after banks refused to lend it any more money.

The Cabinet Office has said that support services firm Interserve's position is not "comparable" to Carillion's despite the former's share price drop this week.

Interserve issued a profit warning in September, saying it was set to make huge losses on an energy-from-waste contract in Scotland. This remains the case and we expect our 2018 operating profit to be ahead of current market expectations and we continue to have constructive discussions with lenders over longer-term funding. While the company "clearly" has too much debt, there are businesses to sell and Liberum believes shareholders would support an equity raise.

But Joe Brent, an analyst at investment bank Liberum, said: "We believe Interserve is very different from Carillion".

Other News

Trending Now

Dolores O'Riordan, The Cranberries Lead Singer, Dies At 46
Their guitar-based sound had an alternative-rock edge at a time when grunge was storming the music scene. It was there she escaped from her sometimes relentless global fame and lived for years with her family.

Liverpool end Manchester City's unbeaten record in seven-goal thriller
Bernardo Silva and Ilkay Gundogan grabbed late consolations for City , but it was a day that firmly belonged to Liverpool . The second-half saw Liverpool produce a potent eight minute spell to take a shock 4-1 lead.

Kim Kardashian Faces Major Backlash for Smoking a Cigarette
Of course, there's nothing wrong with being chubby, but the word is often used to malign women's appearances and bring them down. However, "this program is giving me a kick in the right direction that I need", she went on revealing .

Leggio, Maxwell named as final 2 goalies on US Olympic team
Oshie's one-man shootout show in Socci, Harkins says the Olympic platform can build superstars in an instant. Ebbett had two assists as Canada went 2-1 at the Sochi Hockey Open in August in Russian Federation .

Quique Sanchez Flores rejects chance to replace Mark Hughes
But in a press conference on Saturday, Flores confirmed that he would be remaining at La Liga side Espanyol for the foreseeable future.

Ford Ranger unveiled in Detroit
It also has a Terrain Management System featuring five driving modes: Normal; Grass; Sand; Gravel and Snow; and Mud and Ruts. The trim options available are the XL, XL Chrome, STX, LT, XLT Chrome, XLT Sport, Lariat, Lariat Chrome and Lariat Sport.

Chicago Tribune Trolls Aaron Rodgers, Danica Patrick With Perfect Tweet
On Monday, racing star Danica Patrick , 35, confirmed to the Associated Press that she is dating the 34-year-old quarterback. Earlier this month , Patrick dodged the question when asked by a photog in New York City if she and Rodgers were an item.

House GOP push plan to avert shutdown without Democratic support
Menendez said he hoped it was clear to Kelly that "they're going to have to come more to the center if they truly want a fix". House Republican leaders tried to win over wary conservatives for the spending bill by sweetening it.

Apple to pay United States tax on foreign cash
People walk in front of a branch of USA technology company Apple in Zurich, Switzerland April 5, 2016. Apple will spend an estimated US$55 billion with U.S. suppliers and manufacturers in 2018.

Chibok girls kidnapped by Boko Haram paraded in new video
Al Jazeera could not independently verify that those appearing in the video were among those abducted in Chibok. Stills of the video published online also show Abubakar Shekau, the leader of one faction of Boko Haram .