Carillion scrambles to stay afloat

Carillion, the troubled services and construction group, will reveal a new business plan this week in a bid to avoid collapse.

The company, one of the government's biggest contractors, has issued a series of profit warnings in recent months.

The turmoil has sent its shares tumbling by 90% since July.

The HS2 contractor said it was in discussions about ways of reducing debt and obtaining new funding.

A business plan due to be presented to creditors and other stakeholders on Wednesday will form the basis of a "proposal to restore Carillion's balance sheet", a spokesperson said.

The company employs about 43,000 people worldwide and provides services to half the UK's prisons, as well as hundreds of hospitals and schools.

Analysts estimate Carillion has debts including pensions of about £1.5bn, while its market capitalisation is just £81m.

However, the company's banks, which include Santander UK, HSBC and Barclays, are understood to be reluctant to lend it any more cash.

That could force Carillion to seek some form of government support if its banks do turn off the cash taps.

Given the number of public sector contracts it holds, some analysts think it is "too big to fail" and that ministers may be forced to step in.

Last week the Wolverhampton-based company said it was being investigated by the Financial Conduct Authority over the "timeliness and content" of its stock market announcements from December 2016 to July last year.

The state date for new chief executive Andrew Davies has been brought forward to 22 January.

In September Carillion revealed a huge loss of £1.1bn for the six months to 30 June on revenues that were flat at just under £2.5bn.