Carillion, which has seen its share price tumble in recent weeks following contract write-downs relating to its support services operation, has agreed to give Serco a period of exclusivity to provide time to finalise a business purchase agreement, which both parties are aiming to sign in the next few weeks. 

The contract transfers are likely to take place on a phased basis, with the bulk of transactions completed during the first half of next year. Carillion intends to dispose of the remaining contracts in its UK healthcare facilities management portfolio over the course of next year.

The contracts provide facilities management support services, such as cleaning and patient catering, for more than 50 NHS sites across the UK, including five acute hospital trusts. The portfolio of contracts has current annual revenue of around £90m and a weighted average remaining term of 14 years.

Each contract to be transferred is subject to receipt of client consents, and, if necessary, shareholder approval. 

Keith Cochrane, Carillion’s interim chief executive, said: “Today, we’re announcing progress on a number of fronts, and while our customers and creditors continue to be supportive, much remains to be done. 

“We remain focused on executing our disposals and cost-savings programmes while continuing our discussions with our lenders and other stakeholders to explore further ways of strengthening Carillion’s balance sheet.”