uk construction firm carillion collapses
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice
Emiratesvoice, emirates voice
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice

after no state rescue

UK construction firm Carillion collapses

Emiratesvoice, emirates voice

Emiratesvoice, emirates voice UK construction firm Carillion collapses

Carillion
London - Emiratesvoice

British construction group Carillion announced its immediate liquidation Monday after the heavily-indebted company failed to secure a financial rescue from the UK government and banks in last-ditch talks.

Carillion, which employs 43,000 staff worldwide including 19,500 in Britain, said that the government would nevertheless provide some funding to allow current state projects to continue, following crunch talks over the weekend.

Analysts warned it could turn out to be a costly mistake by the government, led by Conservative Prime Minister Theresa May.

Carillion chairman Philip Green called it "a very sad day for Carillion" after failing to secure its future.

"In recent days... 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," he said in a company statement.

Carillion is a major UK government contractor involved in a wide range of projects from schools to the multi-billion-pound High Speed Two (HS2) railway.

But it has been struggling for some time and in July last year issued the first of several profit warnings.

Carillion on Monday said "it had no choice but to take steps to enter into compulsory liquidation with immediate effect".

It added: "An application was made to the High Court for a compulsory liquidation of Carillion before opening of business today and an order has been granted to appoint the Official Receiver as the liquidator of Carillion."

Despite the red flags, the government continued to award the company major public contracts, including on the flagship HS2 project, leading to criticism.

But the government said it was not its place to prop up the company.

"This is a private sector company, it's regrettable that it's not been able to find a suitable refinancing option with its lenders," Cabinet Office minister David Lidington told BBC radio.

"We did decide that taxpayers can't be expected to bail out a private sector company, particularly when their troubles arose the most part from a side of their business that's nothing to do with UK government contracts," he added.

The government meanwhile advised Carillion staff to still come to work to see through some projects.

"There is no doubt that Carillion posed a huge political challenge for the government, which did not want to be seen to bail out another group of private shareholders and banks after suffering such a backlash from their decisions during the financial crisis," said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.

"However, the prospect of the government temporarily funding existing Carillion public service contracts, alongside the likely increase in costs for renegotiating contracts with new suppliers, makes it highly likely that they could ultimately pay far more than if they had provided the guarantees that Carillion's creditors needed."

City Index trading group warned in a client note that "the knock-on effect on the broader economy could be large, given that the potential number of job losses are in the thousands".

- 'Serious questions' -

Union leaders blamed both the government and Carillion management for the company's collapse.

"The blame for this lies squarely with the government who are obsessed with out-sourcing key works to these high risk, private enterprises," said Mick Cash, general secretary of the Rail, Maritime and Transport union.

Jim Kennedy, a senior official at the Unite union, called for a public inquiry and said there were "serious questions that need to be asked and answered about Carillion's conduct", while he questioned also why the government handed "public money to a company that had issued repeated profits warnings".

Andrew Adonis, who resigned as head of a government-backed infrastructure commission last month, said Sunday that the Carillion crisis raised "big questions" for transport minister Chris Grayling.

Carillion has a wide range of public sector contracts, including providing support services for almost 900 schools and around 50,000 homes for military personnel.

The company, with operations also in Canada and the Middle East, had revenues of £5.2 billion ($7.1 billion, 5.9 billion euros) last year.

In January, British watchdog the Financial Conduct Authority launched an investigation into its market updates.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

uk construction firm carillion collapses uk construction firm carillion collapses

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

uk construction firm carillion collapses uk construction firm carillion collapses

 



GMT 05:06 2024 Tuesday ,06 February

New hunt for flight MH370 gets under way

GMT 05:14 2024 Wednesday ,07 February

Sophisticated Classic Dining Room Design Ideas

GMT 16:17 2018 Thursday ,30 August

Five Saudi women pilots granted GACA licences

GMT 05:17 2024 Wednesday ,07 February

Amazon to open first cashierless shop

GMT 10:31 2014 Tuesday ,23 December

Mirages of failure: Lebanon cannot wait

GMT 07:29 2015 Wednesday ,12 August

Pearson says sells its share of The Economist Group

GMT 09:34 2011 Sunday ,14 August

Syria’s Pharaoh

GMT 15:31 2016 Monday ,22 February

Britain gets first new national daily

GMT 09:34 2015 Friday ,19 June

Classic Arctic roll

GMT 15:13 2016 Saturday ,21 May

Nokia to shed more than 1,000 jobs in Finland

GMT 08:48 2016 Sunday ,10 April

To meet slum kids, Bollywood stars

GMT 00:49 2018 Wednesday ,24 January

Positive aviation sentiments fuel MRO industry's growth

GMT 10:58 2017 Wednesday ,08 March

Europe launches fourth Earth monitoring satellite

GMT 21:55 2016 Thursday ,16 June

Daesh still has 'global reach

GMT 12:23 2017 Saturday ,23 December

Leaders congratulate Japanese Emperor

GMT 14:45 2017 Thursday ,14 December

AnOther Magazine names fashion coordinator

GMT 21:54 2017 Saturday ,25 November

Gearing up for one more F1 show

GMT 21:57 2017 Tuesday ,28 November

Pakistan protests grow as military stays silent

GMT 12:24 2017 Monday ,13 March

How to deal with early

GMT 13:55 2011 Saturday ,30 July

BCC praises HM King hamad’s keynote address

GMT 10:39 2015 Sunday ,25 October

Antioxidant use may promote spread of cancer

GMT 12:21 2012 Sunday ,04 March

Campbell channels Tina Turner

GMT 11:11 2016 Sunday ,17 April

Concord creates impression with Impresario
Emiratesvoice, emirates voice
 
 Emirates Voice Facebook,emirates voice facebook  Emirates Voice Twitter,emirates voice twitter Emirates Voice Rss,emirates voice rss  Emirates Voice Youtube,emirates voice youtube  Emirates Voice Youtube,emirates voice youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

emiratesvoieen emiratesvoiceen emiratesvoiceen emiratesvoiceen
emiratesvoice emiratesvoice emiratesvoice
emiratesvoice
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
emiratesvoice, Emiratesvoice, Emiratesvoice