January 26, 2018 / 8:14 AM / 4 months ago

Carillion collapse triggers loan defaults at projects with HICL

Jan 26 (Reuters) - British investment firm HICL Infrastructure said on Friday the collapse of Carillion had triggered loan agreement defaults at projects and management subcontracts with the construction outsourcing company.

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.

“The company previously announced that 10 projects within the HICL portfolio had facilities management subcontracts with Carillion subsidiaries. The liquidation of Carillion has triggered loan agreement defaults at most of these projects,” HICL said in a statement

“This situation is expected to continue until long-term replacement operators are in place, a process that the company anticipates will take a number of months,” it added, without giving details of the projects.

The current estimated impact of Carillion’s bankruptcy on HICL would be about 50 million pounds ($71 million) in net asset value, adding to a prior provision of 9.4 million pounds, HICL said.

$1 = 0.7021 pounds Reporting by Noor Zainab Hussain in Bengaluru; Editing by Mark Potter

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