Katonga
14 Jan 2018
AUDITORS!!! Who are the Auditors, surely they bear some responsibility here.
Kenj2
14 Jan 2018
Re: Deal looking more likely "a debt for equity will never totally wipe existing shareholders out."No but a Pre-Pack Administration can, and it can achieve much the same result.D4E will leave the banks holding the vast majority of the shares.A pre-pack administration could result in the banks taking complete ownership.Then if the company recovers (as Mouchel did) the banks can get their money back. I doubt they would get 30p in the £1 back with a standard administration.
Hang in to the bitter end
14 Jan 2018
Re: Deal looking more likely "Sorry, but if HMG step in and 'save' Carillion there will be uproar. Not just from UK but further afield. Tax-payer should not be left to pay up."Jamesons,I appreciate the point you're making but I can't help feeling that, often, there just plain ain't a level playing field. We shareholders are now being told that we've made a bad investment in CLLN (I am an ex-employee so hold shares, worth very little now of course, as a result). We were told the same when HMG brought down Railtrack and British Energy. So since the taxpayer" benefitted from the windfall tax and acquisition of other privatised companies at a knock-down price, I'm not gonna lose any sleep if they have to bail out my "poor" investment in CLLN.IMHO ....
trader jack
14 Jan 2018
Re: Deal looking more likely "Who is going to step in and take on the loss making contracts at the same rate as carillion is contracted to, nobody. If the company fails these projects (including Aberdeen bypass and Liverpool Hospital) will likely face more delays and more costs, not borne by Carillion but the taxpayer."pyueck,It seems to me that whichever way you cut it, the tax payer will finish up bearing the costs. Carillion cannot, having bid less than competitors to get the contracts in the first place and therefore are most unlikely to be completed profitably by them. If the contracts can be moved to Carillion's competitors to complete then arguably the cost of the contracts will have to be renegotiated and at a higher cost to the government so it will be left to us poor taxpayers to bear that cost.It could be argued that HM Government should have been much more stringent in assessing the bids for the contracts in the first place. I very much doubt that underbidding the competition benefits those who are handing out contracts for major construction work . As in this case it just ends in tears.TJ
acsatix
14 Jan 2018
Re: Deal looking more likely even the most dilutive capital call I have seen in my life kep the existing shareholders at a high single digits stake... what happens is the will regroup shares so the are in the 100p range then they will issue rights...to buy several shares for each one held...but precondition of this is they can write a decent prospectus and without support of lenders this is a non starter.
pyueck
14 Jan 2018
Re: Deal looking more likely Don’t think the shares will be suspended unless they are calling administration.Yes as I have said before calls for shareholders to be left with nothing .... and the company to avoid administration can’t happeb. Yes there could be huge dilution but by its nature a debt for equity will never totally wipe existing shareholders out. This talk of 1p is total speculation, highly doubt it would be that bad.
acsatix
14 Jan 2018
Re: Deal looking more likely To be fair the shares should be suspended till stable plan is in place and if one will not materialise then suspension would just become a permanent thing... finally if there is a going concern assumption by definition the company cannot wipeout totally shareholders as this would be the definition of a new company being incorporated on the ashes of former company.... which requires liquidation one way or another.
pyueck
14 Jan 2018
Re: Deal looking more likely I don't think the firm or the bankers are wanting a bail out in the sense of the government taking a stake in the firm, providing guarantees or putting in more cash. What the banks want is the government to agree (I believe) to is to a)relax the terms on 3 loss majorly loss making contracts b)pay them quickly for the work done now and in the near future.I think the government agreeing to do this is totally feasible. Who is going to step in and take on the loss making contracts at the same rate as carillion is contracted to, nobody. If the company fails these projects (including Aberdeen bypass and Liverpool Hospital) will likely face more delays and more costs, not borne by Carillion but the taxpayer.On b the government will be reluctant to make any special cases, but if its a case of paying the company for work already done or 20k people losing their jobs I think they will agree.The situation is dire and everybody know (and has known since November that the shareholders face huge dilution). However if a deal can be done, there is a chance that the existing shareholders will be left with a small stake in the newly re-capitalised company. On Friday, and probably even more so Saturday and this morning the feeling was that it was all over and the administrators would be doing their thing tomorrow morning. We now know that the talks will continue tomorrow, I think eventually a deal will be done as the government feels its still a going concern and the result of the total collapse would be a political headache worse than answering a few questions about giving the company some concessions.No idea what this will do tomorrow but think, based on the BBC article, administration isn't happening tomorrow morning. That's a good thing.
Jamesons
14 Jan 2018
Re: Deal looking more likely Sorry, but if HMG step in an 'save' Carillion there will be uproar. Not just from UK but further afield. Tax-payer should not be left to pay up. It will hardly discourage other big firms from bidding cheaply for a contract from HMG, knowing that if things get dicey that then HMG will assist. Its not good for the country or competition. It would be better to pay more in the first place and get a proper job done.
acsatix
14 Jan 2018
Re: Deal looking more likely the only possible solution in my view is some form of loan guarantees on new debt that creates the confidence needed by banks to lend more while cash and capital are raised.... even stakes by bank that collectively represent control sindicate may end up in courts if it turns out these lend at more favourable conditions to get their shares more valuable.... so they create competitive unfair advantage for carillion.... really the legal nuances are quite important in here....
Kenj2
14 Jan 2018
Re: Deal looking more likely Trader Jack,There are already TUPE laws to protect employees when a contract changes hands.If Carillion were outbid and lost their Rochester Prison contract to Serco, then Serco would be obliged to keep on the existing staff at their present wages, and terms of employment.So I do not really see why the same should not apply if all of Carillions prison contracts were giver to Serco or Group4 by the government. And like wise for any building contracts given to Balfour Beatty.www.gov.uk/transfers-takeovers/overview"When a business changes owner, employees could be protected under the Transfer of Undertakings (Protection of Employment) regulations (TUPE) - types of transfers"
Ripley94
14 Jan 2018
Re: Deal looking more likely TJWeren't Balfour in trouble a couple of years ago ..
trader jack
14 Jan 2018
Re: Deal looking more likely I am not well up on the machinations that go on behind closed doors particularly of the Whitehall variety (government not theatre) but could not HMG whoever strip Carillion of all its government contracts and award the management of them say to Balfour Beatty or whoever on the understanding that the present sub-contractors i.e. workers are kept in place until such time as the contracts are completed?I can't see Carillion being traded on LSE tomorrow.TJ
WhoSparticus
14 Jan 2018
Re: Deal looking more likely "it is difficult to think the govt will take a share as by definition.." Well if they don't take equity, and CLLN have no money (they don't - I hope) then its over. OK the shareholders don't matter and the banks don't matter but there are shedloads of jobs at stake, and they do ... so I suspect there will e some innovative thinking going on (and quite right too).
schwee
14 Jan 2018
Re: Takeover tactics Unlike CLLN, Melrose shares trade at over 20x earnings rightly or wrongly. So by issuing £5bn of new shares give or take, their own balance sheet is measurably strengthened, so kicking their own debt problem down the road.
