Embattled construction contractor Carillion PLC (LON:CLLN) saw its shares drop back over 13% today, having soared at the start of the week as investors awaited any news out of Wednesday’s crucial meeting with its lenders.
Press reports last weekend said the stricken FTSE small cap company would present a plan to shareholders and lenders on Wednesday that would form the basis of a proposal to restore the group’s balance sheet.
Carillion has already said it is in talks about ways to reduce its mounting debt pile and securing new funding.
Carillion is a major supplier to the government with a number of contracts, including construction of the UK’s HS2 rail project and school building programmes.
Newspaper reports yesterday said the government has made contingency plans for the collapse of the UK’s second largest construction company.
The firm ran into financial difficulties last year after issuing three profit warnings in five months and writing down more than £1bn from the value of contracts.
It has debts of about £1bn and a £600mln pension deficit, but a stock market value of just £100mln after its shares collapsed by 90% after last year’s warnings.
READ: Carillion issues brief, dismissive response to share price leap on chatter it's close to a rescue deal
In a brief statement on Tuesday, noting the previous session’s share price jump, Carillion simply stated: “The Group is not aware of any material developments that support this share price increase. Further updates on discussions with the Group's financial stakeholders will be provided as appropriate.”
Last week Carillion shares fell after it revealed it is being investigated by the Financial Conduct Authority over the “timeliness and content of announcements” made by the company between 7 December 2016 and 10 July 2017.
In early afternoon trading today, Carillion shares were down 13.7%, or 3.1p at 19.5p.