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Tuesday, 11 July 2017

Carillion to exit Egypt, Qatar and Saudi

Carillion to exit Egypt, Qatar and Saudi: UK construction firm Carillion announced that it is exiting Egypt, Qatar, and Saudi Arabia in addition to exiting some UK partnerships, Reuters reports. Carillion said it would pull out of construction projects in these three countries after a decline in the oil price caused those countries to stall projects and stretch payments on key contracts. It added that it would only pursue jobs in that region in future “via lower-risk procurement routes,” according to the Financial Times. The firm, which also helps maintain British railways and roads, said payment problems on four construction contracts nearing or reaching completion had forced it take a provision of USD 1.1 bn. Carillion had also seen costs escalate on other projects, sometimes due to design changes, taking a particular hit on public partnership contracts with governments where prices are set ahead of time. The company’s CEO resigned on Monday, plummeting the value of the company’s stock.

Other EM exits worth noting this morning include Etisalat leaving Nigeria. The company, which is exiting its 45% stake in the company, terminated a management agreement with its Nigerian arm and gave the business time to phase out the Etisalat brand, Etisalat International’s CEO told Reuters on Monday. Nigerian regulators had tried last week to save Etisalat Nigeria from collapse after talks with its lenders to renegotiate a USD 1.2 bn loan failed.

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