A construction firm behind Aberdeen’s bypass is having to stump up £25 million extra for the project following the Carillion collapse.
Galliford Try had been part of a joint venture with both Balfour Beatty and Carillion to construct the Aberdeen Western Peripheral Route (AWPR), but its partner’s liquidation means Galliford Try is having to contribute the extra money.
It has now booked the £25m “exceptional charge” for the six months to December 31 and announced plans to raise £150m in new equity capital in the coming weeks to “strengthen” the group’s balance sheet and “ensure that the group’s businesses can continue to pursue their respective growth opportunities”.
Galliford Try went on to report an 11% drop in pre-tax profits for the half year to £56.3m, despite seeing revenues jump 14% to £1.5 billion.
But the company assured that it was making “good progress” on the AWPR – which is expected to be completed this summer – as well as other legacy contracts and was otherwise in good financial standing.
Chief executive Peter Truscott said: “We have reviewed the impact on our business from the compulsory liquidation of Carillion, which has resulted in a further reassessment of the likely out-turn from our participation in the Aberdeen Western Peripheral Route joint venture, leading to an exceptional charge of £25m.
“Reflecting the additional financial obligations arising from this contract, we have today announced our plans for a capital raise of £150m.”
Work has continued on the AWPR since Carillion collapsed and most of the company’s workers will be employed, but the exact number of those who take up roles with the other companies will not be known until discussions with contractors have concluded.
Carillion was a key supplier to the Government and has contracts in the rail industry, education and NHS.
Sources have claimed the company was owed £40m by the Government when it went into liquidation earlier this year.