January 19, 2018

Carillion could enter administration on Monday unless United Kingdom backs rescue

14 January 2018, 12:26 | Frank Carlson

The construction firm is seeking additional funding to avoid collapsing

A Carillion sign o the edge of a construction site

The company is the UK's second-largest construction company and a key government contractor.

A Government spokesperson repeated a statement given to Sky News last weekend which said it was "committed to maintaining a healthy supplier market and work closely with our key suppliers".

Carillion had 924 million pounds of long term debt as of June 2017.

Carillion, which was founded in the late 1990s as a spin-off from building giant Tarmac, also operates in Canada, the Middle East and the Caribbean.

Its share price plummeted 90 per cent after announcing its first profit warning in July previous year.

"We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress".

Concerns over the potential imminent collapse of construction group Carillion has led to crisis talks over its 13 United Kingdom defined benefit (DB) schemes, according to reports.

Sky News reported that the approach is part of a contingency plan by Carillion as talks continue with bankers.

"Handing Carillion bosses a blank cheque bail-out is completely unacceptable", Ms Azam said, adding that the company had an "abysmal" track record on protecting workers.

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"We will not comment further unless it becomes appropriate to do so".

The company itself is not expected to attend the pension crisis summit.

The scale of the meeting reflects the huge implications that the collapse of Carillion, one of the government's biggest contractors, would have on the United Kingdom economy and wider public services.

The government confirmed ministers met yesterday to discuss Carillion's future and were "monitoring the situation closely". This should include the possibility of bringing contracts back in-house.

He added that workers "should have protection and guarantees from the government, including an assurance that operations will be directly transferred over to Network Rail with all jobs, pensions and rights safeguarded if Carillion goes bust".

As well as employing 19,500 people in the United Kingdom, it is one of the main contractors for HS2, the government's flagship infrastructure project, and provides services for schools, the armed forces, and road projects for the Highways Agency.

Gail Cartmail, Unite assistant general secretary, said Carillion's workforce was being "held hostage by the whims of the market". It has also raised fears that taxpayers could be left with the cost of running some of the company's government contracts.

Sir Vince, a former business secretary, told BBC Breakfast: "They've got to force the shareholders and indeed the creditors, the big banks, to take losses, and then the government can take responsibility for taking the contracts forward and making sure they are delivered".

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