29 January 2018 | Herpreet Kaur Grewal
John Laing Infrastructure Fund Limited has said it aims to replace Carillion on nine facilities management projects at a cost of £3 million after the latter's collapse earlier this month.
The listed infrastructure investment company announced that it was continuing to implement its contingency plans to replace Carillion on the nine projects and expects this to be on similar terms to the existing contracts within the projects. It anticipates that there will be "minimal service disruption".
However, it initially expects "additional advisory and transaction costs in respect of the appointment of replacement facilities managers to cost approximately £3 million in aggregate".
The company added that Carillion's liquidation of should have "no material impact" on the company, nor will there be any knock-on impact on John Laing's dividend policy.
In a statement, John Laing added: "The company will continue to manage the situation as it develops and provide further updates as appropriate."
Separately, the Financial Reporting Council (FRC) has opened an investigation in relation to KPMG's audit of the financial statements of Carillion plc. The investigation will cover the years ended 31 December 2014, 2015 and 2016, and additional audit work carried out during 2017.
The investigation will be conducted by the FRC's Enforcement Division, and will consider whether the auditor has breached any relevant requirements, in particular the ethical and technical standards for auditors.
Several areas of KPMG's work will be examined including the audit of the company's use and disclosure of the going concern basis of accounting, estimates and recognition of revenue on significant contracts, and accounting for pensions.