Carillion to go into liquidation

The board of Carillion has announced that it is to take steps to enter into compulsory liquidation with immediate effect.

The construction firm’s board revealed that despite engaging in talks with its key financial and other stakeholders – including the government – over the course of the weekend, it concluded that it had no choice but to go into liquidation.

Carillion had talked to stakeholders about options to reduce debt and strengthen the group’s balance sheet.

As part of these discussions, the construction firm asked stakeholders for limited short-term financial support to enable it to trade while longer-term engagement continued.

However, these talks proved to be unsuccessful and an application was made to the High Court for a compulsory liquidation, and an order has been granted to appoint the official receiver as the liquidator of Carillion.

Carillion said that it anticipates that the official receiver will make an application to the High Court for PricewaterhouseCoopers LLP to be appointed as special managers to act on behalf of the official receiver.

"This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years,” said Philip Green, chairman of Carillion.

“Over recent months, huge efforts have been made to restructure Carillion to deliver its sustainable future and the board is very grateful for the huge efforts made by Keith Cochrane [interim chief executive of the Carillion Group], our executive team and many others who have worked tirelessly over this period.  

“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."

The government’s response

David Lidington, minister for the cabinet officer and chancellor for the Duchy of Lancaster, announced that the government would continue to deliver all public sector services following the insolvency of Carillion.

The government will provide the necessary funding required by the official receiver to maintain public services.

Those already receiving their pension from Carillion will continue to receive payment and a dedicated web page and helpline have also been set up for workers.

“Since profit warnings were first issued in July, the government has been closely monitoring the situation and has been in constructive discussion with Carillion, while it sought to refinance its business,” said Mr Lidington.

“We remained hopeful that a solution could be found, while putting robust contingency plans in place to prepare for every eventuality.

“It is, of course, disappointing that Carillion has become insolvent, but our primary responsibility has always been [to] keep our essential public services running safely.

“We understand that some members of the public will be concerned by recent news reports.

“For clarity: all employees should keep coming to work, you will continue to get paid.

“Staff that are engaged on public sector contracts still have important work to do.”

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