British Carillion liquidates business

Gladys Abbott
January 16, 2018

The company had also been awarded contracts on the HS2 railway.

"We have been warning since Thursday night that we thought the collapse of the company was imminent".

Interim chief executive Keith Cochrane will be paid his GBP750,000 salary until July, despite leaving the company in February. At the heart of this company, there is a strong core.

Carillion describes itself as an "integrated support services" business.

In October previous 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.

"HS2 is not at risk as a result of this", the PM's spokesman said.

"Carillion's liquidation is bad news for all those who work for the company and it will have serious knock-on effects for the many smaller firms in its supply chain, some of which will be in serious financial danger as a result of Carillion's demise", said Brian Berry, Chief Executive of the FMB, said.

"Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future".

Chief executive of Gigaclear, Matthew Hare is confident that the contract will not be impacted, stating: 'It is very sad news that Carillion has gone into compulsory liquidation.

PwC said that there was "no prospect of any return to shareholders" given the liquidation appointments.

On 17 July, barely a week after the profit warning, the United Kingdom government revealed that Carillion was one of the winning bidders to build the first phase of high-speed rail line HS2.

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Tim Roache, the general secretary of the GMB Union, said the Conservative government was "asleep at the wheel" when it continued to award work to Carillion despite its profit warnings.

He said the government expected work on the AWPR to continue.

Carillion employs around 20,000 people in the United Kingdom with around 8,000 of these working as subcontractors for the NHS.

City Hospitals Sunderland NHS Trust has said it is not affected by the collapse of Carillion. This should trigger alarm bells for pension savers across the United Kingdom as it puts a huge question mark over the fate of yet another major pension fund.

Sky News reports that the company's bank lenders were considering a last-ditch appeal to fund a rescue plan, but accountancy firm EY is now standing ready to manage a potential administration process.

Where JVs have weak profitability or other problems, taking on even more of that business may hit earnings.

TheJournal.ie has attempted to contact Carillion for comment.

Peter Delow, the chairman of the Cubbington Action Group Against HS2, said the two contractors for the parts of the line which will run through woodland outside the village and through Burton Green near Kenilworth are Balfour Beatty and French company VINCI.

A major British construction company is going into liquidation after failing to secure a financial lifeline.

Any party who has contracts with the liquidated company would be well advised to check the terms of those contracts, and if necessary take advice on the effect of liquidation.

"They will do this by selling an insolvent company's business or assets. Well, with so many companies running into difficulty over the last 10 years, Balfour Beatty, Serco and Capita to name three, there will be a renewed focus on how these companies operate".

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