Carillion, one of the giants of UK construction, has gone into liquidation.
The company said in a stock exchange announcement this morning that it had been unsuccessful in its attempts to secure continuing financial support, and that it had no choice but to enter compulsory liquidation with immediate effect.
The Official Receiver has been appointed to handle the liquidation, with PricewaterhouseCoopers expected to act on its behalf as “special managers”.
PwC has set up a website with advice for all Carillion employees and suppliers, and is currently advising them to carry on working as normal.
The government is to step in with funding to ensure hundreds of public contracts run by the UK’s second biggest construction group can continue to operate.
But the fate of staff in its commercial contracting operations in the UK and around the world is not yet known.
Employing 43,000 people in total, Carillion manages nearly 900 school buildings in the UK, is the second-largest supplier of maintenance services for Network Rail, and holds £200m worth of prison contracts. It also maintains 50,000 homes for the Ministry of Defence.
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A statement from Carillion said: “Further to the announcement made on 12 January 2018, Carillion continued to engage with its key financial and other stakeholders, including Her Majesty’s Government (HMG), over the course of the weekend regarding options to reduce debt and strengthen the group’s balance sheet. As part of this engagement, Carillion also asked those stakeholders for limited short-term financial support, to enable it to continue to trade whilst longer term engagement continued.
“Despite considerable efforts, those discussions have not been successful, and the board of Carillion has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect.
“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. We anticipate 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, and we further anticipate that an order will be granted to that effect.”
Philip Green, chairman of Carillion, said: “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. 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, 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.”