Is the Kier share price heading for zero?
Memories of the failure of rival Carillion at the start of 2018 probably won’t help. However, while I’m concerned about this situation, I think the shares are unlikely to go to zero. The group’s housebuilding division, Kier Living, is up for sale. And its property development business, Kier Property, will be scaled back or sold as well. The second piece of good news is that Kier is not currently in financial distress. Although debt levels have risen above expectations, the company’s average month-end net debt of £420m-£450m is still well below the £920m available under its current debt facilities. These lending arrangements will need to be renewed at various times between 2021 and 2024. But it’s clear Kier has the kind of breathing room that Carillion simply didn’t have.