Photo by Terry Robinson via Wikimedia Commons
This morning, Carillion, the troubled contractor, played down hopes as it has agreed to a deal with the company’s lenders.
In a brief statement, the company said that it was “not aware of any material developments that support this share price increase.”
By lunchtime, shares of the company had dropped by more than 10 percent in the wake of the announcement that was made this morning.
Yesterday, shares of Carillion soared by 26 percent as investors bet that a deal could be struck at a critical meeting with banks that is scheduled on Wednesday.
Late on Saturday, the firm that has its headquarters in Wolverhampton, said that it would deliver a business plan to lenders that are led by Barclays, HSBC, and Royal Bank of Scotland this week.
Carillion is expecting to plug a mammoth funding gap, and it believes that the meeting will give a springboard to turn the company’s fortunes around.
Last year, over 90 percent of the stock market valuation of the firm was wiped out following a series of profit warnings and over £1bn of contract write-downs.
In the wake of the troubles, Carillion was able to convince its lenders to provide emergency funding amounting to £140m. However, £40m is due to be paid back in April, with the remainder scheduled to be returned by the end of 2018.
Under the weight of debts that are topping £1bn, Carillion is having a hard time to pull in as much cash as possible. However, it is likely to require further breathing space from its banks in order to give it some time to resize operations.