Carillion Puts Administrators On Standby Should Talks Fail

Carillion is involved in construction and support services contracts across the UK

Carillion is involved in construction and support services contracts across the UK

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 troubled contractor said it "continues to engage in constructive discussions with a range of financial and other stakeholders regarding options".

Carillion also said turnaround proposals on the table were likely to cost shareholders. The company is in crunch talks over its future with ministers and the Pensions Regulator.

As well as employing 19,500 people in the United Kingdom, it is one of the government's biggest contractors. It employs 43,000 people globally.

It has been awarded contracts to build part of £56bn High Speed 2 railway, including the first phase of the line which will run between London and Birmingham and is scheduled to open in 2026.

It also maintains 50,000 homes for the Ministry of Defence, manages almost 900 schools and manages highways and prisons.

A government spokesperson said: "We can confirm that a ministerial meeting took place yesterday, 11 January".

Having had its rating for Carillion "under review" previously, the City broker has resumed coverage with a "sell" saying it now sees no equity value in the stock.

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".

The assistant general secretary of the Unite union, Gail Cartmail, said: "The government must consider all options while the future of Carillion hangs in the balance, including bringing contracts back in-house".

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.

DEVELOPERS are being sounded out to rescue major infrastructure projects across Scotland if leading construction firm Carillion collapses.

The FT reported that Cabinet Office minister David Lidington met more than 10 ministers on Wednesday including business secretary Greg Clark, transport minister Jo Johnson, and chief secretary to the Treasury Liz Truss. "We are committed to maintaining a healthy supplier market and work closely with our key suppliers", she said.

The company is fighting net debts of more than £900 million, following a crisis sparked in July a year ago when it issued a profit warning.

The business is now worth just £86m after its share price has plunged by more than 90% over one year.

"As Carillion is a major supplier to government, it should come as no surprise that we are carefully monitoring the situation while working to ensure our contingency plans are robust".

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