Signs of life, or just a dead cat bounce?
Shares in Carillion climbed as much as 11 per cent in early trading on Friday morning after the under-fire construction group appointed new financial advisers to help bolster its efforts to avoid collapse.
The FTSE 250 group – which employs almost 50,000 people and is one of the UK government’s largest contractors – said on Friday that HSBC will become its joint financial adviser and joint corporate broker with immediate effect.
Carillion’s shares have been in freefall for most of this week, after a serious profit warning and a sharp rise in its debt levels raised fears over the sustainability of its balance sheet.
The company plans to make some savings by axing its dividend and pulling out of operations in the Middle East, but it is expected to need more serious action such as an emergency rights issue or a rescue deal to save it, though its large pensions deficit is likely to complicate the matter.
Shares in the company were up 8.8 per cent shortly before publication, to 60p.
That said, they also rose as much as 12 per cent on Thursday morning, but still managed to end the day with a 3 per cent decline, so the rollercoaster ride may not be over yet.
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