Carillion set for liquidation after rescue talks fail

In October past year the joint venture was awarded a £200 million contract with Gigaclear to roll out 1Gb/s broadband to the South West England (see Gigaclear signs Carillion telent to build FTTP in SW England), and last February it reached a £1.5 billion agreement with Openreach to extend its national fibre broadband network.

Major UK contractor Carillion has entered compulsory liquidation this morning after unsuccessful weekend talks with creditors and UK government about options to reduce debt and bolster balance sheet.

Government departments issued statements after the announcement, saying they would provide funding to maintain public services, such as running prisons and 900 schools previously carried out by Carillion.

Carillion chairman Philip Green said the liquidation was a “very sad day” for workers, suppliers and customers of the company.

The company has 43,000 staff worldwide, including 20,000 in the UK.

The collapse puts the future of Carillion’s 19,500 employees at risk and also heaps pressure on the government. The collapse raises fears for the jobs and pensions of the 43,000 people employed by the company worldwide as well as questions over what will become of the 450 projects the United Kingdom government has employed the company to carry out.

It reads: “There is a considerable amount of press coverage regarding Carillion’s current financial position, however the impact on CarillionAmey’s operations remains limited and we will continue to deliver services as normal”.

Carillion’s shares prices have plunged more than 70% in the past six months after making a string of profit warnings and breaching its financial covenants.

Britain’s government refused to rescue Carillion, saying it could not be expected to bail out a private company.

He said: “We understand some members of the public will be concerned by recent news reports”.

But critics are unhappy that the government kept awarding contracts as the company floundered.

Carillion has a wide range of public sector contracts, including providing support services for nearly 900 schools and around 50,000 homes for military personnel.

How was analysis of due diligence procedures incorporated into the decision to award Carillion a further government contract worth £62m following the company’s second profit warning?

Oxfordshire County Council has taken over services provided by Carillion including some school meals and cleaning, after the news that the support service provider has gone into liquidation.

The DHSC said that in most cases the services are subcontracted so that the company that holds the contract with trusts remains responsible for providing the services.