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HICL says Carillion collapse has triggered loan defaults on joint projects

HICL expects a further £50mln hit from the demise of Carillion

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HICL says it had 10 facilities management subcontracts with Carillion

Investment firm HICL Infrastructure Company Ltd (LON:HICL) said Carillion PLC’s (LON:CLLN) collapse has triggered loan agreement defaults at most of the projects it shares with the contractor.

Carillion went into liquidation after the construction firm failed to secure a rescue deal in talks with lenders and the government, casting uncertainty over many of its contracts.

READ: Carillion collapse puts contracts at risk but presents opportunities for sector peers

HICL, which had 10 facilities management subcontracts with Carillion subsidiaries, said the estimated impact of the insolvency would be about £50mln in net asset value on top of a previous provision of £9.4mln.

Shares fell 4.8% to 140.3p around midday.

“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 said.

HICL reassured investors that its dividend guidance remains unchanged for the current year and the next two financial years.

It said it will continue to work with its adviser InfraRed Capital Partners Limited to address affected public-private partnerships and to "maintain stable services in the near-term and to secure long-term, credible replacement operators”.

READ: Carillion directors to be questioned by MPs over contractor's collapse

HICL is one of many companies that have said they will be hurt by Carillion’s failure. 

Galliford Try PLC (LON:GFRD) has predicted a £30mln to £40mln blow while Balfour Beatty PLC (LON:BBY) expects to take a £45mln hit. 

Quick facts: HICL Infrastructure Company Limited

Price: 176 GBX

LSE:HICL
Market: LSE
Market Cap: £3.41 billion
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