Embattled Kier picks chief left stranded by Carillion collapse

The construction executive hand-picked to rescue Carillion just weeks before its collapse will on Tuesday be named as the new boss of Kier, another of Britain's embattled building contractors.

Sky News can exclusively reveal that Andrew Davies, who had been due to take the helm at Carillion a week after its liquidation, has been chosen to lead a turnaround of Kier after a dismal few months for the company.

City sources said that Mr Davies' appointment had been ratified by Kier's board at a meeting on Monday, and would be announced to the London Stock Exchange on Tuesday morning, 24 hours before it reports interim results.

The appointment will mark a stunning comeback to the industry for Mr Davies, who previously ran Wates Group, the family-owned construction business.

In October 2017, he was named chief executive-designate of Carillion but was not involved in the company's rapid descent into corporate ignominy.

Mr Davies had previously spent much of his career at BAE Systems, the defence contractor.

Sources said he had been identified as the "ideal" successor to Haydn Mursell, who was effectively ousted as Kier's chief by restive shareholders.

Kier is one of Britain's biggest construction and services groups, counting Crossrail and Highways England among its most important clients.

However, it has had a disastrous few months, culminating in its disclosure last week that its debt position had been revised upwards by £50m after an accounting error.

The announcement further shook investor confidence in the company, which employs 20,000 people in areas ranging from rubbish collection to housebuilding.

Mr Davies' arrival will come just hours after Interserve , another big player in the outsourcing sector, emerged from a pre-pack administration under the ownership of its lenders.

The pressure to replace Mr Mursell became irresistible when Woodford Investment Management, the firm headed by prominent fund manager Neil Woodford, privately demanded executive changes at Kier.

Philip Cox, the chairman, is likely to hail Mr Davies' recruitment as a key step in its turnaround, although there is expected to be further pressure on finance director Bev Dew following last week's announcement.

Kier's board was embarrassed late last year by the results of a rights issue which raised the funds targeted by the company but at the expense of multimillion pound losses for bankers left holding the shares.

Mr Mursell said at the time that the capital-raising was required because of weakening sentiment towards the construction industry from mainstream lenders.

After it closed, he said: "Kier enters 2019 with a strong balance sheet which puts us in an excellent competitive position."

Nevertheless, the broader industry is in a state of flux, with margins under constant pressure and lenders warier in the wake of Carillion's collapse a year ago.

Sky News revealed at the weekend that Mitie, another big outsourcer, was preparing to offer Interserve's new owners about £100m for its support services division, which would create a company employing close to 100,000 people in the UK.

Serco and Sodexo are also said to be circling parts of the business.

A spokesman for Kier declined to comment on Monday night.