Carillion Puts Administrators On Standby Should Talks Fail

Carillion Puts Administrators On Standby Should Talks Fail

Carillion is a major supplier to the Government and key contractor in the first phase of building the £56 billion HS2 rail line, but has seen its share price plunge almost 80% in the past six months after making a string of profit warnings and breaching its financial covenants.

It has previously been reported that EY is on standby for an administration.

It comes as the Government, pension authorities and stakeholders met on Friday in an attempt to thrash out a rescue package for the firm which would help it avoid collapse.

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

A government spokeswoman said: "Carillion is a major supplier to the government with a number of long-term contracts". "The collapse of Carillion could provoke a serious crisis".

Carillion has struggled since reporting half-year losses of £1.15 billion and a meeting was held on Friday to discuss its pensions deficit.

"In particular, we need to know that there is no threat to the cost and completion of the Aberdeen Western Peripheral Route, an issue I raised with the Cabinet Secretary months ago". It is involved in projects such as the HS2 railway line and in maintaining sites for the Ministry of Defence.

Unions warn that 19,500 British jobs are at risk if Carillion can't reach a deal with creditors.

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

The firm has seen its share price plunge almost 80 per cent in the past six months after making a string of profit warnings and breaching its financial covenants.

Carillion declined to comment on Sky News' report.

It said the firm remained in constructive dialogue about short-term financing while "longer term discussions are continuing".

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

Last month, Carillion said it received all necessary consents to defer the test date for both its financial covenants from December 31 to April 30, 2018, and that it was continuing constructive talks with stakeholders on options for cutting net debt and recapitalizing.

It has worked on key projects including the Royal Opera House in London, the Suez Canal road tunnel and Toronto's Union Station.

The PPF, which would take on responsibility for paying pensions to thousands of current and former Carillion workers if it collapses, said: "The PPF is 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 Carillon scheme members and levy payers".

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