Could Interserve be about to follow in Carillion footsteps?
Company's share price tumbles after Government admission
by Abi Moses on 19th January, 2018 and updated 19th January, 2018 12:55am
Shares in construction giants, Interserve, fell 15% on Thursday with rumours that they could follow the lead of former rivals, Carillion and fall into liquidation.
Following the demise of Carillion; the UK's second-largest construction firm, the Government are believed to be closely monitoring Interserve.
A Government statement confirmed, "We monitor the financial health of all of our strategic suppliers, including Interserve. We are in regular discussions with all these companies regarding their financial position. We do not believe that any of our strategic suppliers are in a comparable position to Carillion."
Carillion collapsed earlier this week with debts in excess of £2 billion and an Interserve spokesperson was keen to dismiss fears that the firm could be set to follow suit. The Interserve spokesperson explained, "Last week we announced that we expect our 2017 performance to be in-line with expectations outlined in October and that our transformation plan is expected to deliver £40m-£50m benefit by 2020. This remains the case and we expect our 2018 operating profit to be ahead of current market expectations and we continue to have constructive discussions with lenders over longer-term funding. We are keeping the Cabinet Office closely appraised of our progress as would be expected."
Interserve's chief executive resigned in 2017 ahead of the firm issuing a profit warning last September. Ominously, Carillion issued a profit warning in mid-2017, heightening concerns for the future of Interserve.
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