Carillion Puts Administrators On Standby Should Talks Fail

  • Carillion Puts Administrators On Standby Should Talks Fail

Carillion Puts Administrators On Standby Should Talks Fail

She called for an urgent task force, including employers and trade unions, to be set up to rescue Carillion's outsourcing contract and evaluate how the collapse of the company could impact on infrastructure projects, the public sector and the wider economy.

The company is in crunch talks over its future with ministers and the Pensions Regulator.

In a statement, Carillion said: "Suggestions that Carillion's business plan has been rejected by stakeholders are incorrect".

Carillion also said turnaround proposals on the table were likely to cost shareholders.

Carillion is a major supplier to the Government and key contractor in the first phase of building the £56 billion HS2 rail line, but has seen its share price plunge almost 80% in the past six months after making a string of profit warnings and breaching its financial covenants. It employs 43,000 people globally.

"The workers caught in the middle of this financial meltdown at Carillion are not responsible for the crisis and they 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".

The company is a major supplier to the Government and has contracts in the rail industry, education and NHS.

The firm is now under investigation by the Financial Conduct Authority over the "timeliness and content of announcements" made between December 2016 and July 2017.

The government confirmed ministers met yesterday to discuss Carillion's future and were "monitoring the situation closely".

It is understood the Scottish Government has put contingency plans in place to plug the gap if Carillion collapses, covering both its facilities management and construction services.

A Government spokeswoman said: "Carillion is a major supplier to the Government, with a number of long-term contracts".

The company has been pushed to the brink by cost overruns that forced it into a string of profit warnings previous year and left it on course to breach the terms of its bank loans.

Carillion, which has had to contend with a slowdown in many of its major markets, has seen its share price plummet from 230p a year ago to less than 15p on Friday.

Carillion, which is struggling under £900 million of debt and a £590 million pension deficit, denied the business plan had been rejected by stakeholders, but added that a restructuring could result in a debt for equity swap.

The person familiar with the situation, who asked not to be named due to the sensitivity of the situation, said the government needed to get involved to help prop up the supplier. "It would be inappropriate for us to comment on any individual contractor's internal financial governance".