January 29, 2018 / 8:16 AM / a year ago

John Laing Infrastructure Fund aims to replace collapsed Carillion on projects

A worker walks past a logo on the door of the site office at a Carillion construction site in central London, Britain, January 16, 2018. REUTERS/Simon Dawson

(Reuters) - John Laing Infrastructure Fund JLIF.L (JLIF) one of Europe’s largest listed investors in public infrastructure projects, said it was working to replace collapsed Carillion (CLLN.L) as facilities management provider on nine projects.

There would be minimal service disruption, with advisory and transaction costs related to the appointment of replacement facilities managers to cost about 3 million pounds, the fund said.

Britain’s biggest corporate failure in a decade took place after banks pulled the plug on lending to Carillion. As a result, Carillion went into liquidation, forcing the government to step in to guarantee public services provided by the company ranging from school meals to road works.

JLIF nine operational PPP projects where Carillion manages facilities include four schools projects, four emergency services projects and one road project, the fund said last week The value of these projects is about 8.5 percent of the total portfolio value and about 9.6 percent of its net asset value, it said then.

“The (fund’s) investment adviser believes that the compulsory liquidation of Carillion should have no material impact on the Company and no impact on the company’s dividend policy,” JLIF said in a statement on Monday.

British investment firm HICL Infrastructure (HICL.L) said on Friday the collapse of Carillion had triggered loan defaults at projects and management subcontracts with the construction outsourcing company, sending its shares to a three-year low.

Reporting by Noor Zainab Hussain in Bengaluru, editing by Louise Heavens

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