Published: Mon, January 15, 2018
World Media | By Shelia Harmon

Carillion puts administrators on standby as construction firm fights to survive

Carillion puts administrators on standby as construction firm fights to survive

Criticising the Government's dealings with the company, Mr Cable told BBC Radio 4's Today programme: "The Department of Transport seemed to be handing out contracts to keep Carillion going even though there had been profit warnings, even though there was a very high risk of this company going down".

Sky News reported on Friday that troubled construction and support services firm Carillion PLC has put potential administrators Ernst & Young on standby should refinancing talks fail.

On Friday, Carillion said it remained in constructive dialogue about short-term financing.

Government officials and regulators met on Friday to discuss how to safeguard the interests of more than 28,000 pension scheme members who could face cuts to retirement payments if Carillion does not survive.

According to the Press Association, Carillion's lenders - which include Barclays, HSBC and Santander - rejected the plan because it did not present enough of a restructuring plan for the business.

Senior civil servants from the Cabinet Office are due to attend an emergency summit that will include representatives from The Pensions Regulator (TPR), Pension Protection Fund (PPF), Carillion's pension trustees and an assortment of City advisers.

The Government is notoriously slow at settling bills with contractors, and frequent delays have exacerbated Carillion's cash crunch.

A government spokesperson said: "We can confirm that a ministerial meeting took place yesterday, 11 January". Carillion had 924 million pounds of long term debt as of June 2017.

British building and services company Carillion could enter administration on Monday unless Britain's government backs a rescue plan, Sky News reported on Saturday, citing sources.

Spun out of Tarmac almost 20 years ago and having bought Alfred McAlpine in 2008, Carillion has worked on key construction projects including London's Royal Opera House, the Suez Canal road tunnel and Toronto's Union Station.

Its only asset sale since the crisis erupted has been to offload a portfolio of healthcare contracts to rival outsourcer Serco for £50m - against a broader forecast for disposal proceeds of £300m.

A spokesman added: "Carillion is one of three partners delivering the route".

Such a plan would leave its pension scheme, or the Pension Protection Fund, as a big shareholder.

Carillion past year issued three profit warnings in six months, causing its shares to plummet more than 90 percent since July 7.

Carillion's fight for survival is being led by interim boss and industry veteran Keith Cochrane, a former CEO of engineer Weir Group.

What does under-threat company Carillion do?

"We are monitoring the situation closely and are in regular contact with the management team there".

Carillion reported a first-half pre-tax loss of £1.15bn in September, while it announced just before Christmas that its lenders had agreed to defer a test of its borrowing agreements from 31 December to 30 April.

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