Carillion in £300m Network Rail deal to upgrade Midlands line
Troubled infrastructure giant Carillion has won two contracts worth around £320 million with Network Rail to upgrade infrastructure in the Midlands.
The Wolverhampton-based company said the first will see it spruce up existing track and infrastructure on the route from London to Corby, which will generate £62 million of revenue.
A separate deal through Carillion Powerlines, a joint venture firm, will see work undertaken to complete the electrification of the same route. This contract is expected to generate £260 million of revenue over the next three years.
Carillion, which has about 43,000 staff worldwide, has been thrown into crisis since a July trading update sent shares tumbling by more than 70 per cent in one week.
Earlier this year, the firm also revealed mammoth half-year losses totalling £1.15 billion, having been dragged down by a series of restructuring charges.
The profit warning saw former boss Richard Howson step down, with Carillion announcing recently that Andrew Davies is to take the hot seat in April.
Mr Davies is currently the chief executive of Wates Group, where he has held the role since 2014.
Since Mr Howson's departure, Keith Cochrane has been interim chief executive and has overseen a refinancing and the sale of non-performing assets.
He said of the contract awards: "We are pleased to have agreed these awards with Network Rail, demonstrating that we continue to have the support of key customers and win important new contracts.
"The group faces significant challenges but we remain focused on executing our disposals programme, taking cost out and strengthening our balance sheet."
Shares in Carillion jumped on the news, but still sit around their lowest since the company was formed in 1999, when it was split off from parent company Tarmac. Carillion still employs around 400 at it headquarters on Wolverhampton’s Ring Road St Mark’s.
The company employs around 20,000 in the UK but is slashing the size of its construction business, pulling out of public private partnership work and selling off its healthcare business and other assets as it seeks to shore up its balance sheet.
