Struggling construction and support services group Carillion has appointed some more outside help support its efforts to avoid collapse, bringing in professional services firm EY in an effort to cut costs and collect more cash.
Carillion’s shares collapsed after a profit warning last week, falling 71 per cent amid fears the group will have to launch a debt-for-equity swap or rights issue to avoid an emergency takeover or bankruptcy.
On Friday the company hired HSBC as a joint adviser and broker to help repair its balance sheet, and today it announced it has also appointed professional services firm EY “to support its strategic review with a particular focus upon cost reduction and cash collection”.
Carillion said it has already identified a number of actions it will take to reduce its borrowing, and Keith Cochrane, interim chief executive, said:
We are moving forward quickly with the actions outlined last week. Alongside our own efforts, EY will provide support across the business and bringing an external perspective to our cost reduction and cash collection challenge. My priorities are to reduce the group’s net debt and create a balance sheet that will support Carillion going forward.
We need to simplify the business and demonstrate that value can again be created for shareholders by focusing the group on its core markets, including infrastructure and property services, in which it has good strengths and leading positions.