Carillion defers covenants test date

Carillion has secured approval from its lenders to defer the test date for its financial covenants.

The firm now has until the end of April before tests take place, as discussions with stakeholders on the reduction of net debt are expected to last until the first quarter of 2018. 

Carillion's interim chief executive Keith Cochrane said: "We believe that our lenders' decision to defer the test date demonstrates their continuing support. We remain focused on actively progressing a constructive dialogue with our financial stakeholders on the group's recapitalisation plans." 

News of the effective deferral comes just days after support services firm Interserve also managed to postpone tests for its loan covenants.  

Carillion warned in November that it might breach its financial covenants by the end of the year, with potential delays affecting PPP disposals.  

The group has recently entered into a definitive business purchase agreement with Serco for the disposal of its UK healthcare facilities management business. 

Meanwhile, Carillion’s new CEO Andrew Davies is to start on 22 January, effectively replacing interim CEO Keith Cochrane.