Big UK government contractor sees shares plunge on debt woes

Randall Padilla
January 14, 2018

The company is the UK's second-largest construction company and a key government contractor.

Administrator firms PwC and EY were also reported to have been put on standby as talks about the firm's future carry on.

Gail Cartmail, Unite assistant general secretary, said Carillion's workforce was being "held hostage by the whims of the market".

Carillion also has major contracts to supply facilities management at 83 military sites in Scotland, as well as a 28-year contract managing the "elderly beds facility" at Glasgow's Queen Elizabeth University Hospital.

Scottish Labour's shadow economy secretary Jackie Baillie called on the Scottish Government to clarify the potential impact if Carillion collapses.

Sir Vince, a former business secretary, told BBC Breakfast: "They've got to force the shareholders and indeed the creditors, the big banks, to take losses, and then the government can take responsibility for taking the contracts forward and making sure they are delivered".

"The Government can't just do a financial bailout".

In addition to its rail operations, Carillion also manages almost 900 schools, provides services to the NHS and works with National Grid.

Shares, down 90 pct since co's first profit warning in July, fall as low as 12.5 pence around noon in London.

"The government remains supportive of Carillion's ongoing discussions with their stakeholders", Blain said.

Carillion had 924 million pounds of long term debt as of June 2017.

He said it was a "pretty messy situation", adding: "The situation is pretty bleak".

Unless that funding materialises - either from commercial lenders or in the form of emergency Government support - Carillion would be likely to crash into administration, threatening the jobs of at least some of the 19,500 people it employs in the UK.

But in Friday's statement, Carillion said: "Suggestions that Carillion's business plan has been rejected by stakeholders are incorrect".

The schemes' trustees, The Pensions Regulator (TPR), the Pension Protection Fund (PPF), civil servants from the Cabinet Office, and city advisers are all set to meet today, Sky News reported.

A TPR spokesperson said: "We have been and remain closely involved in discussions with Carillion and the trustees of the pension schemes as this situation has unfolded".

A Transport Scotland spokesman insisted Carillion had "no intention of withdrawing" from the Aberdeen bypass project and that "they too remain committed to completing it in accordance with the contract".

A Government spokeswoman said: "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".

Other reports by AllAboutTopnews

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