HICL shares tumble as Carillion sparks loan agreement defaults
Shares were down nearly 5% in afternoon trading on the London Stock Exchange.
Shares in HICL Infrastructure Company have dived after it flagged a string of loan agreement defaults linked to Carillion’s collapse.
The group was down nearly 5% in afternoon trading on the London Stock Exchange, as it moved to appease lenders by parachuting in new operators for 10 contracts where Carillion was the facilities manager.
HICL said the process would take several months to complete, but lenders were being “supportive of the actions underway”.
The announcement came as Network Rail said around 300 smaller rail suppliers to Carillion are to be paid the arrears they are owed.
In a stock market update, HICL said Carillion’s liquidation could deal a £50 million hit to the firm’s net asset value.
It added: “The company previously announced that 10 projects within the HICL portfolio had facilities management subcontracts with Carillion subsidiaries.
“The liquidation of Carillion has triggered loan agreement defaults at most of these projects and, although the projects’ lenders are currently supportive of the actions under way, those projects will be unable to make distributions whilst they remain in default.
“This situation is expected to continue until long-term replacement operators are in place, a process that the company anticipates will take a number of months.”
Carillion’s liquidation left in its wake a £900 million debt pile, a £590 million pension deficit, hundreds of millions of pounds in unfinished public contracts and put thousands of jobs at risk.
Parliament’s Pensions and Business Committees have written to the Big Four auditing giants – KPMG, EY, PwC and Deloitte – to understand what services they offered Carillion over the past 10 years.
It comes as a string of top bosses at the defunct construction company are to be grilled by MPs next month as the political fallout from the debacle rages on.
The committees have launched a joint inquiry into the group’s demise and plan to call several Carillon bosses as witnesses to evidence sessions on February 6.