UK's Carillion speeding up rescue talks with banks - Sky News

Jan 6 (Reuters) - British building and services company Carillion (Frankfurt: 924047 - news) is due to hold emergency meetings with its bankers in the coming days as it speeds up its search for a financial rescue plan, Sky News reported on Saturday (Shenzhen: 002291.SZ - news) .

Carillion, which is involved in infrastructure projects for the British and other governments including Britain's planned high-speed rail link HS2, has been fighting for its survival after costly contract delays and a downturn in new business.

It is also under investigation by regulators over "the timeliness and content" of statements it made before it issued a profit warning last year.

Sky News, quoting unidentified sources, said Carillion's rescue plan would involve handing back loss-making contracts, revising the terms of others and possibly accepting government financial support if it cannot secure private funding.

That could be a loan on commercial terms, a deal to reprice some contracts, or to allow Carillion to hand back loss-making work to the government, Sky News said.

A spokesman for Carillion declined to comment on the report.

Analysts have estimated the company has debt including provisions, pensions and accounts payable of about 1.5 billion pounds ($2.04 billion) compared with its market capitalisation of about 70 million pounds, according to Thomson Reuters (Dusseldorf: TOC.DU - news) data.

In December, Carillion said discussions with stakeholders regarding its options to cut debt and avoid a breach of debt covenants were "progressing well".

Sky News said the company faced a funding gap of hundreds of millions of pounds and the precise size of the shortfall depended on whether it was able to get out of loss-making contracts. The company's lenders included Barclays (LSE: BARC.L - news) , HSBC and Santander UK (LSE: 44RS.L - news) , it said.

Carillion, which operates in Canada and the Middle East as well as Britain, last month brought forward the start date for new chief executive Andrew Davies to Jan. 22. ($1 = 0.7370 pounds) (Writing by William Schomberg; Editing by Angus MacSwan)