Serco revises agreement to buy Carillion health facilities contracts

Galtero Lara
Febrero 15, 2018

Serco has shaved nearly £20m off the price of 15 healthcare contracts it is taking over from failed contractor Carillion after revising the sale agreement in the wake of the company's collapse.

Carillion went into liquidation on January 15 after talks to rescue the company failed, leaving in its wake a £900m debt pile, a £590m pension deficit, and hundreds of millions of pounds in unfinished public contracts.

"If all the contracts are transferred to Serco under the revised BPA process, the total consideration payable would be £29.7m", the Serco board confirmed in its statement.

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The potential revenues and profitability of the contracts being transferred under the BPA were said to be substantially unchanged, but the change in consideration reflects Serco's re-evaluation of potential liabilities, indemnities, warranties and the additional working capital investment required as a result of Carillion's liquidation.

Serco's existing health operations already generate revenue of more than £350m, employ over 8,000 people, and provide services to organisations such as St Barts, England's largest NHS Trust, and the Prince of Wales Hospital in Hong Kong.

In December, Serco said the contracts it would acquire from Carillion have an average unexpired period of about 14 years and are expected to add about £1bn into its order book.

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