A number of workers and supplier businesses could be at risk as Carillion appoints liquidators after rescue talks failed.
One of the UK’s largest employers, construction group and project management company, has fallen into liquidation after weekend rescue talks failed to reach a satisfactory conclusion to save the business.
Following a profits warning last year, Carillion’s debts are said to in the region of £1bn including a deficit of its pension scheme of £600m. The funds will now be managed by the Pension Protection Fund (PPF) who said they were aware news of the liquidation would be a worry for those concerned but assured members of Carillion’s defined benefit pension schemes that their benefits are protected by the PPF.
Talks with its lenders including HSBC, Barclays and Santander and the Government failed resulting in this morning’s announcement that it has applied for compulsory liquidation. PWC have been appointed to manage the liquidation process.
Carillion, with UK headquarters in Wolverhampton, manages some huge projects for central and local government, including being appointed to run HS2. Here in Stockport they are employed on a number of contracts on behalf of Stockport Council.
Around 20,000 UK jobs could be at risk although all employees were told to report to work this morning as usual.
Carillion chairman Philip Green said it was a very sad day for the company, its suppliers, customers and employees, as recent efforts to restructure the business to create a sustainable future failed:
“In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.
“We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”
Carillion is the second biggest supplier of maintenance services to Network Rail. It also employs thousands of smaller firms, who could also be at risk until the situation as to how they will be affected is made clear.