Published: Sat, January 13, 2018
Sport | By Cameron Gross

Carillion knocked back over business plan as talks continue over future

Carillion knocked back over business plan as talks continue over future

According to Sky news, struggling construction firm Carillion has put one of the big four accountancy firms on standby to oversee an administration as it races to secure approximately £300m of emergency funding by the end of the month.

Carillion said "constructive discussions with a range of financial and other stakeholders" were continuing.

The government will meet Carillion and the Pensions Regulator on Friday to discuss the services and construction company's deficit.

Aside from its construction business the company has many outsourced public sector contracts in health, education, the prison service and local authorities.

Carillion now employs around 20,000 workers in the UK.

Notably, it holds a contract to build part of the forthcoming HS2 high speed railway line and is the second largest supplier of maintenance services to Network Rail.

Adding to the pressure on the small cap firm - which issued three profit warnings in less than six months previous year and has seen its market value collapse by 90% - was a recommendation from broker Peel Hunt to sell the stock ahead of forthcoming newsflow.

The Guardian's website reported shadow business secretary, Rebecca Long-Bailey, as saying: "The collapse of Carillion could provoke a serious crisis".

Unite also believes that if the Government provides any financial assistance or guarantees loans to Carillion, there must be an assurance that workers in the supply chain are protected.

Don't Politicise: BJP's "Advice" To Rahul Gandhi On Rift In Judiciary
Justice Gogoi said "nobody is breaking the rank and it is discharge of debt to nation which we have done". The main issue appeared to be the assignment of cases by the CJI in the Supreme Court.

Scottish Labour said it was important to know "just how exposed the Scottish government and the public purse is if Carillion were to collapse".

Employing 19,500 people in the United Kingdom and 43,000 in total around the world, Carillion will today meet the UK's Pension Regulator and the pension rescue body, the Pension Protection Fund, because included in Carillion's liabilities is a pension shortfall of £587m. "We are committed to maintaining a healthy supplier market and working closely with our key suppliers".

Senior Cabinet ministers thought to include Business Secretary Greg Clark, Transport Minister Jo Johnson and Justice Minister Rory Stewart, were called to a meeting on Thursday to discuss Carillion's future, in a sign that the Government is preparing for the outsourcer's collapse after revealing earlier this week that it had drawn up contingency plans.

The firm's share price has plunged by more than 90% over the past year.

The company is putting together a business plan - which it presented to its banks at the meeting on Wednesday - which it said "will provide the basis for the agreement of a proposal to restore Carillion's balance sheet".

A spokesman for the Scottish government said: "We continue to liaise with United Kingdom government colleagues to monitor and mitigate service risks associated with Carillion's financial situation".

A spokeswoman for the Pension Protection Fund said it was "aware of the discussions between the company, government and banks and, along with the trustees and the Pensions Regulator, will act as it always does to protect the interests of Carillion scheme members and levy payers".

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

Like this: