The crisis-hit support services group Carillion will face a fresh blow on Monday with the departure of its finance chief after just nine months in the job.
Sky News has learnt that Zafar Khan, the company’s group finance director since January, is stepping down in the wake of a massive profit warning which has sparked doubts over its long-term future.
Mr Khan’s exit is thought to have been agreed with Keith Cochrane, who stepped in as Carillion’s interim chief executive in July when Richard Howson was ousted from the role.
The decision to part company with its finance chief may raise fresh concerns about the extent of the crisis at Carillion, which is involved in major infrastructure projects such as the HS2 high-speed rail link.
It also has a major presence in the delivery of road maintenance contracts, rail services and a range of Public Private Partnerships in healthcare and other areas.
Sources said on Sunday evening that Mr Khan’s replacement was expected to be Emma Mercer, the finance director of Carillion’s construction services arm.
However, one insider suggested that she would not join the main board of the company – which, if true, would be an unusual decision for a business facing the level of investor scrutiny that Carillion is currently experiencing.
It was unclear whether Ms Mercer would be announced as a temporary or permanent successor to Mr Khan.
The departing finance chief joined Carillion in 2011, initially as finance director for its Middle East and North Africa business, and then as group financial controller.
He previously worked at Associated British Ports Holdings and other industrial groups.
Carillion shareholders will be watching closely for details of any severance payments to Mr Khan, and are certain to oppose anything which goes beyond his minimum contractual entitlement.
The company’s shares are down more than 83% over the last year, and Mr Cochrane has indicated that the medicine he intends to administer will be painful.
Analysts expect that a deeply discounted rights and restructuring of its pension liabilities will be required to shore up Carillion’s balance sheet.
The company has hired EY, the professional services firm, to accelerate its cost reduction and cash collection.
While it now has a market value of just £188.75m, the company effectively carries more than eight times that sum in debt and other liabilities.
Carillion has annual revenues in excess of £5bn, and employs approximately 43,000 people.
The company declined to comment on Sunday night.
Source: Sky News