Carillion post-mortem

[PinkDalek]

Anyway all is not yet lost (as far as I know) but I see Ian has just picked up some news from Sky.

Do you mean the news Ian picked up from me (which I in turn picked up from Sky)

Whatever, I can't take the uncertainty any longer - this habitual 'Doris' is now out at 16.27p

Hi Bree, I wasn't trying to undermine you. The story flashed up on the news so I thought it was new news. Hence my post.

Ian.

Different articles:

Regulators to hold pensions summit as Carillion crisis deepens Thursday 11 January 2018 https://news.sky.com/story/regulators-t ... s-11203432

Carillion lines up administrator in case rescue talks fail Friday 12 January 2018 https://news.sky.com/story/carillion-li ... l-11204463

[Arborbridge]

I'm surprised that they are still trading shares in CLLN - who's buying? Not only that, but I see the price has improved 20% in the past hour.

Arb.

[Arborbridge]

This is going to look interesting on my study of "should I have sold or held?" cases

Luckily, I won't be covering CLLN for a while as this is a long term investigation rather than what is happening now - but even so, CLLN has to go down as a win for "Sell".

Arb.

[Breelander]

I'm surprised that they are still trading shares in CLLN...

Only just - my broker couldn't offer a confirmed price on CLLN. I had to trade 'At Best'.

Not only that, but I see the price has improved 20% in the past hour.

The price is all over the place! It hit 12.5p less than quarter of an hour after I sold at 16.27p, only to recover to above 16p an hour later.

Bottom line - nobody know what they're doing. I'm just glad to be out

[moorfield]

This is going to look interesting on my study of "should I have sold or held?" cases

It might be more useful to look from the other end of the telescope and ask "why did I buy?". Perhaps one answer to that, as I've mused here before, is CLLN was never "big cap enough" for HYP, floating at the lower end of the FTSE350 during its dividend paying days. It's FTSE100 companies for me from here on ...

[moorfield]

The price is all over the place! It hit 12.5p less than quarter of an hour after I sold at 16.27p, only to recover to above 16p an hour later.

Meanwhile the dividend hasn't changed.

0p.

[Bouleversee]

Oh dear! My £6766.35 purchase cost shows a current value of £357.22 @ 15.82p on my p/f valuation and I probably wouldn't get even that much before costs as it is presumably a mid price and doubtless already sunk lower. And my children have each got similar losses thanks to me. All in ISAs to make matters worse. Is there any point in selling at this stage or could there by any chance of an increase? The latter is a num question btw. Does anyone else still hold? I did think of selling when the price first fell but when the Govt. awarded them the HS2 contract for my area I thought things couldn't be too bad.

[bunfight]

Agreed, what a disaster. I've still got ~600 shares, but it doesn't seem worth selling now as they're only worth ~£70 after costs

[Arborbridge]

This is going to look interesting on my study of "should I have sold or held?" cases

It might be more useful to look from the other end of the telescope and ask "why did I buy?".

That's an entirely different question, and more often addressed. I'm trying to resolve whether - on average, and in my particular case - whether my decisions to sell HYP shares have been "correct" compared with just holding on.

[Arborbridge]

Bottom line - nobody know what they're doing. I'm just glad to be out

I sold too, principally for convenience. I don't won't to get dragged into a long corporate process of bundles of paperwork.

It's probably the wrong thing to have done, but that's it for me now. See the price bounce on monday when an agreement is forged - precisely what happened with Thomas Cooke.

[idpickering]

Oh dear! My £6766.35 purchase cost shows a current value of £357.22 @ 15.82p on my p/f valuation and I probably wouldn't get even that much before costs as it is presumably a mid price and doubtless already sunk lower. And my children have each got similar losses thanks to me. All in ISAs to make matters worse. Is there any point in selling at this stage or could there by any chance of an increase? The latter is a num question btw. Does anyone else still hold? I did think of selling when the price first fell but when the Govt. awarded them the HS2 contract for my area I thought things couldn't be too bad.

Hi Bouleversee, it's good to see you back on this board again. I'm sorry for your troubles with this stock, but despite this, I look forward to seeing you here again in the future.

Ian.

[Alaric]

One of the regular Guardian columnists has noticed that Carillion is in trouble.

https://www.theguardian.com/commentisfr ... ayers-bill

It's a valid point in the piece though, how entwined is Carillion in all sorts of public sector or near public sector projects? Were it to be taken into State ownership to safeguard these projects, what sort of price, if any, might existing shareholders see?

[minerjoe]

If I was the government, I would just take it for nothing - the debts and pensions it would take on are price enough frankly. The business has zero value at this moment hence why it cant get any money from anyone

[Bouleversee]

Thanks, Ian. Just popped in for a brief chat but the minute anyone says we shouldn't be discussing CLLN 'cos it's no longer a HYP share, I'm off again.

[Bouleversee]

One of the regular Guardian columnists has noticed that Carillion is in trouble.

https://www.theguardian.com/commentisfr ... ayers-bill

It's a valid point in the piece though, how entwined is Carillion in all sorts of public sector or near public sector projects? Were it to be taken into State ownership to safeguard these projects, what sort of price, if any, might existing shareholders see?

Zilch, I expect. However, one might argue that they gave us all a false impression by continuing to award contracts. What's sauce for the goose, etc., since I believe they are accusing CLLn board of just that, aren't they? Let's all write to our MPs if we can afford the postage.

[Dod101]

I have puzzled on the point that Bouleversee has just made and find it difficult to understand why the HS2 contracts would be awarded to a JV (or consortium, don't remember which) which includes Carillion and why indeed why the JV partners would have Carillion on board unless they got some sort of guarantee that in the event of trouble they would stand by Carillion.

The other thing is that I think that with a 'normal' company they would have been in administration by now.

If I were the Government I would not take on board at any price but would contingency planning like mad right now.

Dod

[Bouleversee]

I have puzzled on the point that Bouleversee has just made and find it difficult to understand why the HS2 contracts would be awarded to a JV (or consortium, don't remember which) which includes Carillion and why indeed why the JV partners would have Carillion on board unless they got some sort of guarantee that in the event of trouble they would stand by Carillion.

The other thing is that I think that with a 'normal' company they would have been in administration by now.

If I were the Government I would not take on board at any price but would contingency planning like mad right now.

Dod

My understanding is that the Chilterns slice of HS2 was awarded to CLLN directly. The govt. is going to have to prop up that commitment in some way or the whole HS2 scheme will be jeopardized and the poor taxpayer will have to pay whatever. We CLLN shareholders will, of course, have to pay twice.

Remind me how much all these incompetent idiots get paid with impunity.

[vrdiver]

Well, still holding 7,854 Carillion shares and nursing a 95% loss (excluding dividends).

The shares could halve in value again, or be wiped out in a restructuring. Whatever happens, I suspect it will turn into a 100% loss.

I could sell, recover about £1k and put it into something else, but with the amount of government work that Carillion have picked up since the troubles, I'm hoping for some sort of path back to redemption. Not a full recovery (not in my lifetime anyway!) but a conversion to a smaller, sturdier business.

The risk is that the shareholders get nothing as a result of that conversion

As others have said, the lesson from Carillion is now worth more than the shares. I just have to work out what the lesson is!

[NeilW]

One of the regular Guardian columnists has noticed that Carillion is in trouble.

https://www.theguardian.com/commentisfr ... ayers-bill

It's a valid point in the piece though, how entwined is Carillion in all sorts of public sector or near public sector projects? Were it to be taken into State ownership to safeguard these projects, what sort of price, if any, might existing shareholders see?

Why not just put Carillion into administration and get the debts and pensions monkey of the back of the business. That's what administration is for.

It's always worth remembering that the business is separate from the company that contains it. Once it goes into administration, the administrators can run the business or it can be pre-packed into another shell for £1. The creditors and the remaining shareholders then take the appropriate cold bath.

Capitalism without bankruptcy is like Catholicism without hellfire. It doesn't work as a concept.

[tjh290633]

A late RNS has appeared: https://www.investegate.co.uk/carillion ... 08218019B/

Update on Recapitalisation and Restructuring Discussions

Carillion plc ("Carillion" or the "Group") met with representatives of its creditor groups to present its business plan on 10 January 2018. Further to this presentation, Carillion continues to engage in constructive discussions with a range of financial and other stakeholders regarding options to reduce debt and strengthen the Group's balance sheet. Suggestions that Carillion's business plan has been rejected by stakeholders are incorrect. It is too early to predict the outcome of these discussions but Carillion expects that any such agreement is likely to involve the raising of new capital and the conversion of existing financial indebtedness to equity which would result in significant dilution to existing shareholders. As part of its engagement with stakeholders, Carillion is in constructive dialogue in relation to additional short term financing while the longer term discussions are continuing.

Who knows what the market will think on Monday?

TJH