Carillion, the a leading international integrated support services business, which employs around 43,000 people, is one of the UK’s largest construction businesses, and operates in the UK, Canada, and Middle East, with annual revenues of over £5bn, has filed for compulsory liquidation.
According to a Financial Times news story, ‘Carillion collapses into liquidation’, published on 15 January, the move followed the failure of the Group’s talks with lenders over the previous weekend.
The government announced immediately that it would be providing funding required by the liquidator – known as the Official Receiver – ‘to maintain the public services carried on by Carillion staff, sub-contractors, and suppliers’. Carillion employs around 19,500 personnel in Britain, and is a major builder and facilities management services provider for the public sector.
On 15 January it was announced that the High Court had appointed the Official Receiver of companies including Carillion Plc, Carillion Construction Ltd, Planned Maintenance Engineering Ltd, Carillion Integrated Services Ltd, and Carillion Services 2006 Ltd, with Michael Jervis, David Kelly, David Chubb, Peter Dickens, David Hammond, and Russell Downs of PwC appointed as special managers to support him. A joint PwC and Carillion Group statement said: “The Official Receiver’s priority is to ensure the continuity of public services while securing the best outcome for creditors. Unless told otherwise, all employees, agents, and subcontractors, are being asked to continue to work as normal, and they will be paid for the work they do during the liquidations.” The Special Managers, all licensed in the UK to act as Insolvency Practitioners, explained that they would be ‘exploring any potential sale of the businesses and assets in whole or part’.
A BBC story published on the day of the news, ‘Carillion collapse raises job fears’, said Carillion had ‘run into trouble after losing money on big contracts and running up huge debts’. The story claimed that its ‘biggest problems’ had been ‘cost overruns’ on three UK public sector construction projects:
-
The £350 m Midland Metropolitan Hospital in Sandwell: the opening of which, the BBC story said, is expected to be delayed to 2019, ‘due to construction problems’.
-
The £335 m Royal Liverpool Hospital, with a completion date ‘repeatedly pushed back amid reports of cracks in the building’.
-
The £745 m Aberdeen bypass – ‘delayed because of slow progress in completing initial earthworks’.
