Carillion Share Discussion Threads

[hpcg] 14/1/2018 12:21

jakNife - bank loans are senior, and in one case senior and secured. This is the latest tranche of money when CLLN was already distressed. As I'm short the equity via a spread bet and have no interest in the bonds my research in the area of seniority is both superficial and academic. Based on what Wshak has posted that the convertibles trade at 20% then presumably they must be pari-passu with other lending other wise they would seem to be over priced.



If I was a bond investor I would be interested in which subsidiaries the 40 million had the charge over - I would guess the most profitable ones!

[coxsmn] 14/1/2018 12:19

The taxpayer bailed out the banks, this time its the banks who should be bailing out Carillion imho.

[careful] 14/1/2018 12:01

Way back in the early 1970's Rolls Royce was baled out by HMG.
They were in trouble on a single project that was consuming cash.
Many important defence and civil contracts elsewhere.

In those days it was highly controversial as the the Tory government had a 'lame duck' policy of letting weak companies fail.
They had been spending billions on the likes of British Leyland and others, good money after bad.

In the case of RR. shareholders were wiped out, but the company prospered and was later re privatised in 1987.

[samdb] 14/1/2018 11:50

HCPG has hit the nail on the head here.Any rescue will be to keep the company operating but shareholders will be wiped out.

[vauch] 14/1/2018 11:44

Reminds me of the Marconi fiasco massive co mas of government contracts and was also allowed to fold.
I have a feeling this will go the same way

[philanderer] 14/1/2018 10:51

FWIW ,.. Sunday Mirror like all newspapers will have their own agenda ;-)


"PM 'resists huge bailout for stricken contractor Carillion' amid fears £1.5billion debt collapse could deal hammer blow to schools, hospitals and transport projects"

......ministers are unwilling to step in and underwrite debts, according to the Sunday Mirror, with calls for shareholders and banks to take the hit instead of the public purse.

[hpcg] 14/1/2018 10:41

I think some people, through the powers of wishful thinking, are conflating CLLN the investment and CLLN the company. The company will most likely continue to trade under protection from creditors, and this is the part where there would be government intervention by, for example, funding working capital. Investors, and that includes lenders will rightly lose out. Equity will lose everything, bondholders everything, the banks somewhere between everything and almost everything.

[pyueck] 14/1/2018 10:41

Did people watch andrew marr show. Sounds like deal is going to be done.

Mr Lewis told the BBC the government is "making sure all plans and contingency plans are in place".

"But it is a going concern... and hopefully they'll be able to work with their partners to get the working capital they need to continue providing important services," he told the Andrew Marr Show.

Government bailout?
Mr Lewis refused to be drawn on whether the government would bail the company out.

"It's a very commercially sensitive situation so I wouldn't comment further than to say I would hope to see that the working capital that they need will be there working with their partners," he said.

[pugugly] 14/1/2018 10:26

Henchard - Thanks for that especially re Lloyds as they were not mentioned in the BBC news story today - OK not a major hit against profits but if CLLN goes down possibly an indicator that smaller loans to sub-contractors might be impaired.

[pyueck] 14/1/2018 09:56

kirk it is 10am today not tomorrow!

[gersemi] 14/1/2018 09:54

I am confused as to why the UK Govt (and its related agencies) would sign off on commercial contract(s) knowing full well CLLN was in deep sh*t?

I believe CLLN is too big to fail and it will enjoy some form of support.

[cc2014] 14/1/2018 09:49

IMHO the banks have already pulled the plug as they will only lend if government guarantees and they believe 300m not enough to keep it going. I'd go so far as to say they pulled the plug in October when they impaired the loans on their books.

[kirk 6] 14/1/2018 09:45

So 10am tomorrow if they don't suspend there maybe one last bail out chance tomorrow for shareholders

[pyueck] 14/1/2018 09:43

hxxps://news.sky.com/story/under-threat-hs2-construction-giant-carillion-in-emergency-talks-11207396

FT saying meeting is 10am. Expecting full day of scrambling to do a deal. Still think deal is possible, will banks really want to pull plug, let's see.

[syd7777] 14/1/2018 02:35

Top government officials are attending Whitehall and not ministers,to me that implies a deal.The Banks are willing to loan £300 but want government assurances of payment on their contracts,to date they have been slow in paying and are at fault.3 major contracts with them are at a loss and terms need to be renegotiated.D4E will come at a later date after a few more deposals.I am surprised with the childish comments here from short holders,as they might be afraid that even after dilution it might be 40p in 6 months.DOYR very high risk coming for them Monday.

[kingston78] 13/1/2018 21:28

The time will come when those people in charge of running the company be investigated for fraud and misrepresentation. The auditors could be in trouble too for signing off the earlier years' accounts with a clean bill of health.

The warning signals were there if a skillful accountant were to carry out in-depth analysis of its published accounts. There was window dressing at the year-end boosting cash balances by delaying payment to suppliers. The amount of interest payment for the year gave away the secret that the average net borrowings during the year was much higher than that at the year-end, and rising year-on-year. The company was robbing Peter to pay Paul, continuing to chase volume of work at the expense of margins. Surely the well will run dry one day, and that day has come.

We should not always believe in what we read, including audited accounts.

[henchard] 13/1/2018 21:17

There was a story from Bloomberg after banks Q3 results:

"Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc’s suffered an escalation in bad loans in the third quarter because of their exposure to struggling U.K. construction company Carillion Plc, according to a person with knowledge of the matter.

Bad loans at Lloyds rose by almost a third to 270 million pounds ($360 million) in the three months through September from a year earlier, because of a “single large corporate impairment,” Chief Financial Officer George Culmer said in October, without identifying the company. At RBS, the commercial banking division’s net impairment of 151 million pounds was driven by a “single name,” Chief Executive Officer Ross McEwan said."

To put Lloyds' £270m writedown of bad loans into context, profit for the quarter was £1,470m.

[diku] 13/1/2018 21:13

And no doubt insiders will move onto their next projects!!...

[nigelpm] 13/1/2018 20:42

Anyone know which banks are used by the company and how much debt each are liable for. If significant could see a hit on the relevant bank shares?

Tiny amount of money in the grand scheme. Loose change to them literally.

[srpactive] 13/1/2018 20:36

RBS are another, I am long them, and they have been
rising all week.

dyor very high risk.

[hpcg] 13/1/2018 20:33

Pug - tiny amounts of money in the great scheme of things. Santander is the most exposed lender I believe.

[pugugly] 13/1/2018 20:27

Anyone know which banks are used by the company and how much debt each are liable for. If significant could see a hit on the relevant bank shares?

ALSO - and possibly a bigger percentage hit (for investors anyway) where quoted sub-contractors are in the middle of contracts and have significant invoices outstanding or progress payments due. Could give them major cash flow difficulties.

The problem for investors is that Carillion is so diverse with so many tentacles in so many pies that difficult to know which suppliers/subcontracts are at risk and for how much. KNOWLEDGE/THOUGHTS?

Fully agreed there MUST be no bail out for debt including banks and loan note holders and shareholders . Suppliers, sub-contractors and staff need to be protected to ensure that the operations in the UK for which Carillion are responsible do not collapse into chaos.

Pension liability to be carried by the Pension Protection Fund.