December 22, 2017 / 7:51 AM / 7 months ago

Carillion says lenders OK deferral of covenants until April

(Reuters) - Carillion (CLLN.L) said on Friday it had received all necessary consents from lenders to defer two financial covenants to April 30 from the end of this year, sending shares in the British builder up more than 5 percent.

FILE PHOTO: A Carillion sign is seen in Manchester, Britain July 13, 2017. REUTERS/Phil Noble/File Photo

Hurt by a downturn in new business and costly contract delays, analysts estimate the company is grappling with debt including provisions, pensions and accounts payable of about 1.5 billion pounds ($2.01 billion).

Its market capitalisation stands at less than 75 million pounds, Reuters Eikon data shows, reflecting a fall of more than 90 percent in the wake of three profit warnings in the span of five months.

On Friday it said discussions with stakeholders regarding its options to cut debt and avoid a breach of debt covenants are “progressing well”.

In November, the company issued a third profit warning and said it need some form of recapitalisation as it was at risk of potentially breaching debt covenants.

Shares in the company, which helps to maintain British railways and roads, were up 4.3 percent at 0917 GMT.

The company this week moved forward the start date for new CEO Andrew Davies to Jan. 22 from April 2.

Reporting by Hanna Paul in Bengaluru; editing by Jason Neely

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