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Carillion creeps higher as HSBC parachuted in ahead of possible £500mln fundraise

Carillion shares were in freefall at the start of the week after it issued a shock profit warning

battersea power station construction work
Carillion is currently working on the redevelopment of the iconic Battersea power station

Shares in Carillion PLC (LON:CLLN) edged higher this morning after the beleaguered construction services group brought HSBC on board as its joint financial adviser and corporate broker as it looks to dig itself of the whole it fell in earlier this week.

On Monday, Carillion’s chief executive Richard Howson walked the plank after revealing that full-year revenues would be lower than expected.

WATCH: Carillion 'dragged through a hedge fund backwards'

Shares plummeted in response to the shock profit warning and the FTSE 250-listed company has seen the best part of £600mln wiped off of its market value this week.

The hiring of HSBC comes as speculation mounts that Carillion will need to raise a significant amount of money to help its rebuild, while the sale of its construction business has also been mooted.

Only yesterday, JP Morgan analyst Samuel Bland suggested that the firm probably needs to raise around £532mln in the near future, a view echoed by Jefferies’ Sam Cullen.

“Realistically, we see no future for Carillion without a rights issue of at least £500mln as we believe the group will find it increasingly difficult to win support services work with the balance sheet in its current state,” wrote Cullen in a research note.

Carillion shares added 4% to 58p on Friday.

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Quick facts: Carillion

Price: £0.14

Market: LSE
Market Cap: £61.1 m

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