LONDON: Takeover speculation drove Carillion shares almost 20 percent higher on Wednesday after a London newspaper reported that a Middle Eastern firm was preparing a bid for the struggling construction and support services company.
A spokeswoman said Carillion did not comment on “market speculation” in response to a City A.M. report on Tuesday which said a Middle Eastern construction group planned to submit a letter of intent for a takeover.
Carillion, whose market capitalization has dropped to £200 million ($268 million) from a peak of £1.67 billion a decade ago, is set to report first-half results on Friday.
City A.M. reported that the potential buyer would wait to analyze Carillion’s results and the state of its finances before tabling any bid.
Shares in Carillion have fallen nearly 75 percent since mid-July when it booked an £845 million writedown on construction contracts and announced the departure of its chief executive.
Carillion’s troubles have been compounded by its debt and pension obligations, as well as problems collecting cash.
The company said in July its first half average net debt was £695 million, while its pension deficit net of tax was £587 million. Carillion is selling non-core businesses and has suspended its dividend to try to reduce its debt burden.
Winning new contracts had become harder as spending in the Middle East adjusted to lower oil prices, and the firm had also experienced some delays in British public spending decisions since Britain voted to leave the EU.
Carillion has said it will focus on rail and property services as it seeks to turn itself around.
Britain’s Carillion lifted by Middle East bid report
Britain’s Carillion lifted by Middle East bid report
Related
India seals $3bn LNG agreement with UAE
- Leaders hold talks to strengthen trade, defense ties
NEW DELHI, DUBAI: India signed a $3 billion deal on Monday to buy liquefied natural gas from the UAE, making it the Gulf country’s top customer, as the leaders of both countries held talks to strengthen trade and defense ties.
The agreement was signed during a very brief two-hour visit to India by UAE President Sheikh Mohammed bin Zayed Al-Nahyan for talks with Indian Prime Minister Narendra Modi.
They pledged to double bilateral trade to $200 billion in six years and form a strategic defense partnership.
Abu Dhabi state firm ADNOC Gas will supply 0.5 million tonnes of LNG a year to India’s Hindustan Petroleum Corp. for 10 years, the companies said.
ADNOC Gas said the agreement brings the total value of its contracts with India to over $20 billion.
“India is now the UAE’s largest customer and a very important part of ADNOC Gas’ LNG strategy,” the company said.
The UAE is India’s third largest trading partner and Sheikh Mohammed was accompanied by a government delegation that included his defense and foreign ministers. The two sides signed a letter of intent to work toward forming a strategic defense partnership, India’s Foreign Secretary Vikram Misri told reporters.
Misri, however, said that the signing of the letter of intent with the UAE does not mean that India will get involved in regional conflicts.
“Our involvement on the defense and security front with a country from the region does not necessarily lead to the conclusion that we will get involved in particular ways in the conflicts of the region,” he said.
