Carillion went into liquidation earlier this month after it failed to secure a rescue deal in talks with lenders and the government. The construction firm’s demise was due to mounting debt and a series of profit warnings and left many of its contracts in doubt.
“John Laing Capital Management Ltd, the company's investment adviser, continues to work on implementing its contingency plans to replace Carillion as facilities management provider on the nine JLIF projects and expects this to occur on similar terms to the existing contracts within the projects,” John Laing said in a statement on Monday.
“The investment adviser anticipates that there will be minimal service disruption, however initially expects additional advisory and transaction costs in respect of the appointment of replacement facilities managers to cost approximately £3mln in aggregate.”
John Laing tried to reassure the market that there were no projects under construction where Carillion is the contractor.
The investment company owns one project where Carillion is liable for any construction defects but a recently completed survey did not find any “significant areas of concern”, John Laing said.
'No material impact'
Carillion’s failure should have no material impact on John Laing or its dividend policy, it added.
“The company will continue to manage the situation as it develops and provide further updates as appropriate,” John Laing said.
John Laing is not the only company to have to make contingency plans following Carillion’s demise.
Fellow investment firm HICL Infrastructure Company Ltd (LON:HICL) last week said Carillion’s collapse has triggered loan agreement defaults at most of the projects it shares with the contractor.
HICL, which had 10 facilities management subcontracts with Carillion subsidiaries, said the estimated impact of the insolvency would be about £50mln in net asset value on top of a previous provision of £9.4mln.