Carillion Puts Administrators On Standby Should Talks Fail

Carillion warning spurs pensions crisis talks

Carillion is behind large government infrastructure projects including the HS2 high-speed rail, but the firm is grappling with £1.5bn of debt and a pension shortfall of £587m.

The general secretary of the RMT rail union, Mick Cash, said Carillion's workers were "not responsible for the crisis".

It has previously been reported that EY is on standby for an administration.

The crisis-hit construction firm, one of the largest suppliers of services to the public sector, has called on the government to step in to reduce the financial burden of a string of failed projects around the country. It employs 43,000 people globally.

The BBC understands that the Ministry of Justice has drawn up plans to bring £200m of prison contracts run by Carillion back into public control.

A spokesperson for the Pensions Regulator said the organisation remained "closely involved" in discussions with Carillion and the trustees of its pension schemes.

Last month, Carillion said it received all necessary consents to defer the test date for both its financial covenants from December 31 to April 30, 2018, and that it was continuing constructive talks with stakeholders on options for cutting net debt and recapitalizing.

He added that workers "should have protection and guarantees from the government, including an assurance that operations will be directly transferred over to Network Rail with all jobs, pensions and rights safeguarded if Carillion goes bust".




A government spokeswoman said it has been monitoring the situation to ensure its "contingency plans are robust".

The firm is now under investigation by the Financial Conduct Authority over the "timeliness and content of announcements" made between December 2016 and July 2017.

The company provides vital services to hundreds of schools.

Jon Trickett MP, Labour's shadow minister for the Cabinet Office, responding to talks on the future of Carillion, said: "It has been clear for months that Carillion has been in difficulty but the Government has continued to hand over contracts to the company even after profits warnings were issued".

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

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

Last week, the company was dealt a fresh blow when the City watchdog launched a probe into the "timeliness and content" of statements it made to the‎ stock market about is financial position between December 2016 and July past year, when a massive profit warning sent its shares crashing by 75%.

Carillion, which has had to contend with a slowdown in many of its major markets, has seen its share price plummet from 230p a year ago to less than 15p on Friday.

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