Carillion puts administrators on standby

Carillion puts administrators on standby

Carillion puts administrators on standby

A Government spokeswoman said: "Carillion is a major supplier to the Government with a number of long-term contracts".

EY, the accountancy firm, had been placed on standby to act as administrator to Carillion.

Government officials and regulators will hold crisis talks on Friday aimed at safeguarding pensioners' interests at Carillion, the vast construction group which is racing to avoid collapse.

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 Government is notoriously slow at settling bills with contractors, and frequent delays have exacerbated Carillion's cash crunch.

Scottish Labour's shadow economy secretary Jackie Baillie called on the Scottish Government to clarify the potential impact if Carillion collapses.

Carillion, which is struggling under £900 million of debt and a £590 million pension deficit, denied the business plan had been rejected by stakeholders, but added that a restructuring could result in a debt for equity swap.

"If the Government is forced to institute a rescue package they need to also ensure that the supply chain is fully protected as many of these workers lack even the protection of basic employment rights, as they are employed on a bogus self-employed basis, through agencies and via umbrella companies".

It is also the second largest supplier of maintenance services to Network Rail.

Shares, down 90 pct since co's first profit warning in July, fall as low as 12.5 pence around noon in London.

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.

"You can see that one the one hand, it's in everybody's best interest that Carillion continues, but at the same time it's hard to chart a way forward".

As well as employing 19,500 people in the United Kingdom, it is one of the government's biggest contractors.

In a statement, Carillion said: "Suggestions that Carillion's business plan has been rejected by stakeholders are incorrect".

Further press reports earlier today said the government is being urged to bring Carillion into public control amid fears the construction company could collapse.

As Sky News revealed last weekend, without support from the Government, Carillion's syndicate of banks will not provide up to £300m of new funding required from the end of the month.

It said the firm remained in constructive dialogue about short-term financing while "longer term discussions are continuing".

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