Carillion’s cradle to grave journey over 19 years

Cradle to grave in 19 years
July 1999	Carillion demerged from Tarmac
January 2001	John McDonough takes helm as chief executive with support services growth plan
February 2006	Acquisition of Mowlem for £350m
April 2007	Richard Adam appointed to board as Finance Director.3
February 2008	Acquisition of Alfred McAlpine for £565m
December 2008	Pension valuation.
December 2009	Richard Howson appointed to board as Executive Director.5
March 2010	2008 pension valuation 15-month deadline.
September 2010	Richard Howson appointed Chief Operating Officer, remaining on the board
October 2010	2008 pension valuation agreed.
April 2011	Acquisition of green services firm Eaga for £298m
June 2011	Philip Green appointed to board as Senior Non-Executive Director.8
December 2011	Pension valuation.
January 2012	McDonough retires. Richard Howson appointed Chief Executive.
March 2013	2011 pension valuation 15-month deadline.
December 2013	Pension valuation.Alison Horner appointed to board as Non-Executive Director.11
May 2014	Philip Green appointed Chairman.
June 2014	2011 pension valuation agreed.
July 2014	Carillion reveals merger talks with Balfour Beatty. But bid to becomes UK’s biggest contractor comes to nothing
December 2014	2013 pension valuation agreed.14
July 2015	Keith Cochrane appointed to board as Senior Independent Non-Executive Director.15
December 2016	Richard Adam retired as Finance Director.16
2017
1 January	Zafar Khan appointed to board as Finance Director.17
1 March	2016 Annual Report and Accounts signed and published.18Richard Adam sold entire existing shareholding for £534,000.19
~End March–15 April	Emma Mercer returned to UK as Finance Director of Construction Services and brought to the attention of Richard Howson and Zafar Khan “some issues with which she was not comfortable”.
8 May	Richard Adam’s long-term incentive plan awards for 2014 vested. He sold the total amount for £242,000.21
May	The board conducted a review of accounting treatment for receivables following Ms Mercer’s concerns. This was reviewed by KPMG. The review concluded that assets had been misclassified but there had been no misstatement of revenue. Acted as a trigger for wider review of contract positions.
7 June	The board held a “lessons learned” exercise which considered cultural, managerial and operational shortcomings.22
8 June	The board considered a presentation on a possible equity issue.23
9 June	Final dividend for 2016 paid worth £55 m.
4–5 July	The Chairman, and board the following day, were informed that their brokers were not able to underwrite the proposed equity issue and were advised that a trading update should be made on 10 July. Philip Green remained hopeful for a “positive and upbeat” announcement to the market.24
9 July	Richard Howson stepped down as Chief Executive. Replaced by Keith Cochrane as Interim Chief Executive.The board agrees a contract provision of £845 m to be included in their interim 2017 financial results.25
10 July	Carillion announced the £845m contract provision and comprehensive review of the Group’s business and capital structure.26
12 July	Carillion’s share value fell 70% from 10 July.27
14 July	EY appointed to support its strategic review with a focus on cost reduction and cash collection. HSBC appointed as new broker.28
August	The board identified a need to put in place further short term committed bank facilities.29
3 September	Zafar Khan “spooked” the board with a financial update.
11 September	Zafar Khan sacked as Finance Director and Emma Mercer appointed as his replacement. New non-executive directors appointed and Transformation Officer seconded in from EY.31
29 September	Half-year results included a further £200m profit write down.
24 October	Deferral of pension deficit contributions agreed, releasing £100 m unsecured and £40 m secured new bank finance.33
17 November	Third profit warning issued, alongside announcement that the company was heading towards a breach of its debt covenants.34
First week of December	Changed assumptions in weekly cashflow materially reduced the company’s short-term cashflow forecasts.35
11 December	Kiltearn Partners, the largest shareholder in Carillion, halved its stake.
22 December	Cashflow forecast delivered to finance creditors showed the company would have less than £20 m of available cash in March 2018. As a result, it was unable to make further drawings under its £100 m unsecured facility without further waivers being granted by each of them.37
Late December	New lenders informed the company that a further waiver would not be given unless an approach was made by the company to Government.38
31 December	The company submitted a formal request for support to Government.39
2018
3 January	FCA notified Carillion that it had commenced an investigation into the timeliness of announcements made by the company between 7 December 2016 and 10 July 2017.40
4 January	The Company met Government officials to discuss status of restructuring efforts and the need for short and long-term funding.41
9 January	The Company met with HMRC to explore the possibility of deferred payment to in respect of tax liabilities, which were otherwise due in January, February, March and April 2018. The outcome was inconclusive.42
12 January	Carillion paid £6.4 m to a series of advisors and lawyers, including KPMG (£78,000), FTI Consulting (£1m), EY (£2.5m), Slaughter and May (£1.2m).43
13 January	The company sent a letter to Cabinet Office making a final request of £160 m, including an immediate £10 m.44
14 January	Cabinet Office informed the company that it would not be willing to provide such support to the company.The board concluded that the company was insolvent.45
15 January	Directors petition the Court for the compulsory winding up on the grounds Carillion was unable to pay its debts. Accepted by the Courts and Official Receiver appointed as liquidator, with PwC appointed as Special Managers to assist with the liquidation.Government announced they were making £150 m available to support the liquidation and laying a contingent liability to indemnify the Official Receiver.47
16 January	Greg Clark MP, Business Secretary, wrote to the Insolvency Service and the Official Receiver asking them to fast-track their investigation into the causes of Carillion’s failure and the conduct of the directors.48
18 January	TPR announced they were launching an anti-avoidance investigation into Carillion’s funding of their pension schemes.49

from Construction Enquirer http://www.constructionenquirer.com/2018/05/16/carillions-cradle-to-grave-journey-over-19-years/

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