Carillion Share Discussion Threads

[samdb] 13/1/2018 09:30

How can people not read an RNS properly. Nothing is priced in other than retail investors' misplaced optimism.There will be significant dilution from the current price, either to zero or if you get really lucky 1 or 2p.

[nigelpm] 13/1/2018 09:06

One thing is for sure the Govt will want it out of the way ASAP - suspect they will try for a few more days to get a deal with fresh funding - if that fails then administration.

[diku] 13/1/2018 09:06

The Marconi!!!...Do you have to bring back those bad memories?..

[blueball] 13/1/2018 09:04

Remember Marconi.

[diku] 13/1/2018 08:59

Think Govt will provide funding for a Private Equity to take a stake in company...

[nigelpm] 13/1/2018 08:48

Yesterday's news that there will be dilution as part of a solution is not new and should not affect the share price any more than has already been priced in.

Sometimes I wonder if people actually read RNS or read what they want to believe.

The clue was the emboldened bit:


but Carillion expects that any such agreement is likely to involve the raising of new capital and the conversion of existing financial indebtedness to equity which would result in significant dilution to existing shareholders.

Anyone putting new capital in won't be doing it for the fun of it - they'll want a decent return and that's before the existing bondholders get a massive haircut.

[sux_2bu] 13/1/2018 08:45

Govt is possibly going to nationalise clln.

[cc2014] 13/1/2018 08:41

I think we should consider the size of the short term funding required.

CLLN asked for £300m short term funding and the banks thought there presentation was too optimistic. So, do they need £400m?, £500m? more? we don't know.

In today's world sometimes people throw around numbers as if they don't matter. What's £500m between a few banks? but it's alot. It really is.

But more fundamentally it comes back to credibility over and over. The £140m they had a few months ago was supposed to fix the problem. Now it's another £300m or £500m or whatever. What's to say in another 3 months they won't neeed another £300m? That's the problem the banks have got as they don't agree with CLLN's figures.

Credibility.

We can all run the numbers ourselves if we want. Suppliers aren't going to work for them going forwards on 120 days. That's going to have to be pulled into 30-60 days, although I guess most will demand cash up front or payment in 7 days. That's the issue. How many millions will that cost. And that's why the cash is flooding out the door.

And if they don't pay their suppliers appropriately projects will finish late and then they are in for liquidated and ascertained damages which will mean more losses.

It's a vicious circle. If this is to be resolved without administration, it has to be recapitalised in the next 7 days because any longer and work will start to grind to a halt on sites.

The issue with that is, how do you get all the different bondholders and 18 different banks to agree to anything in that time?

[diku] 13/1/2018 08:38

What goes up will come down and what goes down can go dipper dipper down...

[rcturner2] 13/1/2018 08:34

dealy is just JAF mark II, head in the sand, cannot see what is so obvious

[pyueck] 13/1/2018 08:29

Dealy mate sorry but think your reputation is in shreds. Even if what you say is partially true, and i agree that dilution has already been priced in, your previous comments have been so wrong that anything you now say has no weight at all.

[dealy] 13/1/2018 07:55

Incredible hysteria being stoked up over the last few days. Fake news on steroids. Meanwhile the company has not informed the market of any new deterioration in trading. Yesterday's news that there will be dilution as part of a solution is not new and should not affect the share price any more than has already been priced in.The company will probably get the short term funding and the longer term recapitalisation that it needs without any more hysteria. It is a sizeable enterprise with a 16 billion pounds order book. Still some trading opportunities ahead

[nigelpm] 13/1/2018 07:31

Exactly Book. Absolutely no chance Govt takes that route. Even if they do equity will be wiped out.

[bookbroker] 13/1/2018 07:26

No way the Govt. should bale out this company, it would set a precedent for the future that any company with contracts with the NHS, etc should be underwritten by the public purse. Clln. has been appallingly managed, so why should it be nationalised effectively, these companies have no right over others to be given preferential treatment, might as well apply to every other company with public service contracts!

[rcturner2] 13/1/2018 07:19

thanks wllmherk

supremely ironic that JAF calls others smug and arrogant

[syd7777] 13/1/2018 02:16

FT weekend is saying all the Banks are urging the government to bail out CLLN.D4E with the Banks is a no go,with the current share price at 14.20 and news of heavy dilution could see it in single figures by Monday.The IIs might have been a bit more supportive but with the false Sky news today(taking a bribe)the 30% drop was their making to support their friends(HFs).My comrades in HMG as reported last Sunday,Could make a Emergency loan at a commercial price and low interest,or underwrite the Bank loans.This will no doubt facilitate the disposals.The Canadian Health asset could be sold to a private institution or the Canadian government for millions (250?)in the near term,with the new CEO arriving on the 22nd.Yes its all speculation(will the government bend over backwards?)Yes they will,but by how far?.IMO the new CEO needs a little headway to deliver some important improvements,while the current and previous management(Fools) have taken a Blue chip £1 Billion pound company to £60 million in 12 months GLA and don’t forget the wise words from srpactive,DOYR and very risky.

[philanderer] 13/1/2018 00:38

just urquhartstewart
@ustewart

Partner and co founder of Seven Investment Management.

just urquhartstewart@ustewart

32 minutes ago

Looks like Carillion the first nationalisation in decades - well at least in part.

[spacedust] 13/1/2018 00:31

This will survive and go the same way as Lonmin and Songbird.....massive dilution coming bit company will survive

[steak1] 13/1/2018 00:25

The company I work with started working with Carillon in 2006. Very quickly payment terms were extended to 60 days end of month, despite the supplier charter talking about working together shared values etc. Then came the reverse auctions where you won a job then the company had to bid again against all your competitors that lost. Next came June and December when you would not get paid so the payment terms were a disgrace, however this improved Carillion's cash position at the reporting periods.

Reverse factoring was introduced by the coalition government to help smaller companies to receive payment early and help with the economic recovery of the country, to access this benefit Carillon asked the companies to sign up to 120 days payment ( 4 months ) even though they had to pay their employees and suppliers monthly, but if the reverse factoring was removed the company still had to stay on 120 days payment. These companies and their employees get up at 4 a.m on a Monday morning and work hard for little reward. Most of the smaller sub-contractors will probably lose their businesses,employees out of work and the company owners may lose their houses.

Apparently the Carillon Directors changed the bonus rules that protected their bonuses in 2017, entered into overseas grand projects ( I forgot to say Carillon gets paid very quickly by the UK Government to help the supply chain ) and to cap it all the chairman has a CBE for services to business, and was an advisor to David Cameron on corporate responsibility.

I am disgusted at the Directors behaviour and this is why capitalism is under threat. The FCA needs to show its teeth. I also hope the family and friends of the Directors read this thread so they can really see what they have done to many families at this time.

To quote a great man "what so ever is well done no matter how humble is noble' I am obviously talking about the sub-contractors and employees, the Directors can reflect on their own actions.

If any wrong doing is found to have taken place by the FCA investigation, the people responsible should face the full weight of what was once great British justice.

[pyueck] 12/1/2018 22:58

Guys everybody knew there would be huge dilution before today. But let’s remember that a d4e swap will mean the company has less debt and the company a) potentially will survive and b) the leverage for existing shareholders will be lower.

The share price is 14p, a year ago it was over £3. The fall is not without good reason, I.e the companies profits were a lot of rubbish. However to say that the value of the shares will be 1p after a d4e swap is wild speculation. We don’t know the terms yet. Debt holders won’t be able to convert debt that is trading at 20p in the pound to the current value of the share at face value. They will take a haircut, in conjunction with existing shareholders also having a rights issue or more likely and open offer. Even if the share is diluted 90% this would in know way mean the share will be 1p. It will depend on how much the share is diluted and what the value of the newly structured company is. Hence why banks are keen to ensure the turnaround plan is realistic before they ageee to it.

Again I am not underestimating the scale of the issues and total collapse is a real possibility still. However the rns I think at least shows that administration is not on the cards this weekend (I thought it may well have been) and that discussions with lenders are ongoing. A big part of me thinks lenders will not want to see this one go south, they have nothing to gain from it. So much is up in the air any speculation of what the dilution will be or what the resulting share price after any deal will be is just speculation.

All I think is that today’s share price reflected the incorrect news that the creditors had rejected the proposals and that administrators were waiting at the door. I don’t think it’s quite that bleak, yet ...., and for that reason I see a rise on Monday to around the 20p mark. If a deal could be thrashed out, even just to sort out the short term financing, before Monday it could reach 25p. But as I say the long term value, who knows.

[wllmherk] 12/1/2018 22:46

You have called this correctly RCT from over £2 and along with Fenners both of you have taken quite a bit of stick, unfairly IMV. Glad I sold out at 110p, was my worst investment in 2017 and I lost a fair chunk of money. However, I learned a valuable lesson not to invest too much in one share and not get seduced by dividend yield.

wllm

[nigelpm] 12/1/2018 22:38

Spot on Invisage. It's done.