Builder Galliford Try tapped investors for £150 million on Wednesday to bolster its finances in the wake of Carillion’s collapse.
The demise of the building and support services giant was triggered by a clutch of problem deals.
These included the over-running £550 million Aberdeen Western Peripheral Route, which Carillion was working on with Galliford and Balfour Beatty.
Galliford, which also took a £25 million hit for claims on the road, said shouldering Carillion’s commitment would need an extra £150 million in cash, prompting the capital raise.
Chief executive Peter Truscott said the project had been “very painful” for the company.
He added that Galliford could have met the added burden through existing cash resources but that would have stymied growth plans.
“We had a choice to make. We could fund it but that would mean starving the housebuilding and the regeneration and partnerships business.”
Galliford also brought forward plans to increase the dividend cover to boost its cash position, which cut the interim payout to 28p from 32p.
The shares sank 15%, or 147.5p, to 840p as the fundraising overshadowed reasonable results.
Pre-tax profits, stripping out the exceptionals, were up 29% to £81.3 million for the six months to December 31. The regeneration and housing arms lifted profits.