Economy

Troubled Carillion lines up administrator amid rescue talks

Troubled Carillion lines up administrator amid rescue talks

Sky News reported that the approach is part of a contingency plan by Carillion as talks continue with bankers.

A spokeswoman for Carillion said they met creditors on Wednesday but would not comment on reports of further talks.

"Handing Carillion bosses a blank cheque bail-out is completely unacceptable", Ms Azam said, adding that the company had an "abysmal" track record on protecting workers.

However, Carillion said it remained in constructive talks over securing additional short term financing and that longer term discussions were also continuing.

"It is too early to predict the outcome of these discussions but Carillion expects that any such agreement is likely to involve the raising of new capital and the conversion of existing financial indebtedness to equity which would result in significant dilution to existing shareholders", Carillion explained in a statement.

Senior civil servants from the Cabinet Office are due to attend an emergency summit that will include representatives from The Pensions Regulator (TPR), Pension Protection Fund (PPF), Carillion's pension trustees and an assortment of City advisers.

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

Employing 43,000 people, it provides services to government departments including justice, health and education, and has built hospitals, roads and rail lines.

EY and PricewaterhouseCoopers have reportedly been asked to compete for the role as administrator to the HS2 high-speed rail-link contractor in recent weeks, with EY said to have been lined up by directors.

The company is a major supplier to the Government, maintaining prisons across the country and managing around 900 schools.

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Their attitude is said to have prompted senior figures close to Carillion to discuss the possibility of emergency financial support from the Government.

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

Unite assistant general secretary Gail Cartmail, said: "The government must consider all options while the future of Carillion hangs in the balance, including bringing contracts back in-house".

The rescue plan shown to lenders on Wednesday includes handing back some loss-making contracts, revising the terms of others and potentially accepting financial support from the Government if it can not secure it from private sector sources.

A government spokesperson said: "We can confirm that a ministerial meeting took place yesterday, 11 January".

The meeting comes as Carillion - a major government contractor on projects including High Speed 2 - races to secure additional funding to avoid collapse, with around 19,500 United Kingdom jobs at risk.

"We are committed to maintaining a healthy supplier market and work closely with our key suppliers".

Carillion was forced to ask its banks, which include Santander UK, HSBC and Barclays, for support after breaching its loan agreements past year when it issued a series of profit warnings.

This all follows the revelation last week that Carillion is being investigated by the UK's Financial Conduct Authority over a series of Stock Exchange announcements it made before last July's profit warning.

A spokeswoman for the Pension Protection Fund said it was "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 Carillion scheme members and levy payers".


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