Finance

The government held crisis talks over the potential collapse of one of the UK’s construction giants

houseReuters

  • Minister met to discuss the future of construction giant Carillion, amid fears the struggling firm is approaching collapse.
  • The company is fighting net debts of more than £900 million, following a crisis sparked in July last year when it issued a profit warning.
  • As well as employing 19,500 people in the UK, it is one of the government’s biggest contractors.


LONDON — Senior ministers met on Thursday to discuss the future of construction giant Carillion, amid fears the struggling firm is approaching collapse.

The FT reported that Cabinet Office minister David Lidington met more than 10 ministers on Wednesday including business secretary Greg Clark, transport minister Jo Johnson, and chief secretary to the Treasury Liz Truss.

The scale of the meeting reflects the huge implications that the collapse of Carillion, one of the government’s biggest contractors, would have on the UK economy and wider public services.

As well as employing 19,500 people in the UK, it is one of the main contractors for HS2, the government’s flagship infrastructure project, and provides services for schools, the armed forces, and road projects for the Highways Agency.

The government would have to negotiate new contracts for all those services should collapse.

The company was once valued above £2 billion but is now fighting net debts of more than £900 million, following a crisis sparked in July last year when it issued a profit warning, suspended its dividend, and said key contracts were not losing money as debt rose.

It is also under investigation by the Financial Conduct Authority over the content of financial statements it issued before July’s profit warning.

A further meeting will be held on Friday between Cabinet Office officials, pensions regulators, and Carillion pension scheme trustees to discuss the future of the pension scheme, which has a £590 million deficit, the FT reported.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

eleven − 9 =

Most Popular

To Top