Bloomberg | January.17.2018
Stephen Phillips, Co-head of Orrick's European Restructuring team, recently spoke to Bloomberg regarding the liquidation of Carillion Plc, a UK construction company that recently collapsed under £1.6 billion of debt.
The company held numerous government service and construction contracts. Prior to the liquidation, when restructuring efforts were being made by existing lenders, distressed debt funds largely stayed away from buying the debt, as the business was highly troubled and had an asset light model likely to lead to very little pay out in an insolvency. The price of the debt is likely to collapse following the liquidation, and some funds are considering whether there is value in the estate if any of the services contracts can be sold to new contractors willing to take them.
“The liquidator will be looking at all options from selling the group as a whole to individual contract transfers,” said Stephen, adding, “There may well be money that eventually flows into the estate, depending on how any disputes are settled.”