acsatix
14 Jan 2018
Re: Deal looking more likely it is difficult to think the govt will take a share as by definition this will be a conflict of interest in future contracts awards... or at least That is how I would see it... I have not stopped learning in my life so this could be one occasion too where I see a contractor partly owned by the. govt to be used to outsource govt contracts... how is tha as off-balance-sheet technique.
WhoSparticus
14 Jan 2018
Re: Deal looking more likely Whatever deal there is , shareholders will lose the rest of what they have left in the company. The government will want a share, the banks will want a share and the dilution will destroy what little value current shareholders have left.
acsatix
14 Jan 2018
Re: Takeover tactics great post.... well leveraged buyouts do happen and yes the enablers are banks that lend support . And earn commission for the same year the deal happens ( who cares if in five years when debt kills the new entity some loss is booked under the tenure of some other banker. Btw what a nice shorting case this creates at the right time...
numberbiter
14 Jan 2018
Takeover tactics Now, what would anyone say if Carillion bid for GKN offering 405p per share being 81p per share in cash with the balance in Carillion shares? I presume you fall over laughing. Well, there is no need because Melrose Industies bid is just as audacious.Melrose's latest accounts show that net debt stood at £658 million (34p per share) with a £22million deficit on their pension scheme. Annualised EPS was a mere 3.9p, while on a cash basis this was negative at (5.3p). In financial terms (based on the current numbers and not taking into account previous successes) Melrose industries has no more value than Carillion, which as we know is not much. The only difference appears to be that their bankers are willing to lend them more money.So I see the solution to Carillon's problems; they should bid for GKN at 420p in cash, wholly payable in Carillon shares. Of course, this is stupid, but not much more so than Melrose Industries bid which should be rejected out of hand.
acsatix
14 Jan 2018
Re: Deal looking more likely it is clear a collapse is not helpful to anyone involved. clearly there will be need of fresh capital but i am sure both banks and shareholders will be happy to take part in this if the alternative is a total wipeout.... of course the contract renegotiations and disposal will happen as applicable... within the laws...It is messy but solvable if people do not become dogmatic... and yes then the topic of accountability will be a relevant one too... including recourse to civil and criminal charges...so not all is lost but it is close to be so without people sticking to rationality.
Ripley94
14 Jan 2018
Re: Deal looking more likely Yes pyueck...i saw the Marr show.The situation did not appear to be as bleak as the many comments below.
pyueck
14 Jan 2018
Deal looking more likely [link] Lewis told the BBC the government is "making sure all plans and contingency plans are in place"."But it is a going concern... and hopefully they'll be able to work with their partners to get the working capital they need to continue providing important services," he told the Andrew Marr Show.Government bailout?Mr Lewis refused to be drawn on whether the government would bail the company out."It's a very commercially sensitive situation so I wouldn't comment further than to say I would hope to see that the working capital that they need will be there working with their partners," he said.
sgd
14 Jan 2018
Re: The game is up Really? Please explain, I find that doubtful.
sgd
14 Jan 2018
Re: How about this Interesting. I don't see how that can do that. Once the company is in administration (which is what I guess they mean by corporate failure) all payments are in the hands of the administrators. I can't see any firm of administrators paying bonuses to directors before paying secured creditors and those creditors are so large that I suspect there will be nothing left to pay directors bonuses.
Rogadar.
14 Jan 2018
It looks like it's the end [link]
pyueck
14 Jan 2018
Meeting 10am According to the FT the company is meeting whitehall officials at 10am to discuss a deal which would involve:- The government agreeing to relax the terms on some contracts and making pledges to pay future cash for work done more rapidly.- In return the banks would provide the short term funding.Apparently the government is not enthusiastic about the deal and if no deal is agreed then it looks unlikely this will open on Monday morning unless the banks have a last minute change of heart.No idea what the outcome will be but looks on very very shaky ground. In some ways it would probably be in the governments interest to agree to the changes to contracts if that meant Carillion survived, jobs and suppliers would be saved and there would be a lot less work for the government to do to stop their work just stopping from Monday. However politics is what will rule and I am not sure what is worse, 20,000 losing their jobs on Monday or the government seeming to have helped a company who has been so incompetent.
LifeInPlastic
14 Jan 2018
Re: News statements this weekend Vince Cable the man who happily gave huge profits to big institutions when floating Royal Mail and called ordinary people who applied for a few thousand shares spivs.
geta4tune
14 Jan 2018
News statements this weekend Vince Cable has stated that there should be no bail out by the government, shareholders should bear the loss if CLLN goes into admin. The Telegraph also said investors will loose if CLLN goes into admin. Don't they realise investors have already lost 95% of their investment? Pontificating about the remaining 5% is trivial!
deepsleeves
14 Jan 2018
Re: Injection of equity? " I think the best outcome would be a 'soft' administration supported by interim finance of £300-£500 million from the government" Meanbugger"Ihe government also needs to protect subcontractors and trade creditors from massive losses because of the extent they have relied on CLLN's government contracts."and "An outcome where unsecured creditors get 60-70p in the pound would be ideal - sharing in the pain but not likely to cause a systemic problem for the building industry"Tosh - I do not want any of my money used to support this. Auditors seem likely option to carry a lot of the can for this. Perhaps the Partners and there liability insurers could cough up before the lawsuits?Deep
Meanbugger
14 Jan 2018
Re: Injection of equity? Afterwards because you need a firm of accountants to dig into the accounts to see exactly what went wrong and what statements were made at the time to shareholders. The auditors are likely to face intense scrutiny for the part they have played as are the non-execs. Just like with the Grenfell Tower disaster you may have a fair idea of who should be prosecuted but you can't do it immediately. You have to wait until other processes have been completed.
