Proactive Investors - Run By Investors For Investors

Carillion shares jump as it confirms proposals to buy UK healthcare business

Carillion is trying to shore up its balance sheet after delays to new contracts, rising costs and writedowns on legacy projects led to mounting debt and a profit warning
Carillion wants to offload its Canadian and UK healthcare arms to raise cash after a profit warning

Troubled construction and outsourcing group Carillion PLC (LON:CLLN) has confirmed that it has received proposals to buy its UK healthcare business, sending its shares higher.  

The company, which kicked off a strategic review in July after a profit warning and the departure of chief executive Richard Howson, said it has received approaches from “more than one credible counterparty” for a possible acquisition of the business.

Shares jumped 4.94% to 45.65p in afternoon trading.

Carillion wants to sell the business in an effort to strengthen its balance sheet following deterioration in cash flows on some problematic construction contracts.

In September the group booked a further £200mln in contract write-downs to add to the £845mln of provisions revealed in July.

READ: Carillion drops over 12% as says exploring options including a share issue to shore up its battered balance sheet

Interim chief executive Keith Cochrane has said he wants to raise cash by offloading its Canadian and UK healthcare arms.

Canada is the largest component of the two businesses and the group hopes the sale of the business will generate more than £300mln.

View full CLLN profile View Profile

Carillion Timeline

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use