Yorkshire workers await news as Carillion collapses into liquidation after crunch talks fail

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Construction giant Carillion has said it has "no choice but to take steps to enter into compulsory liquidation with immediate effect" after talks failed to find another way to deal with the company's debts.

Yorkshire jobs threat: Unions demand reassurances follow the collapse of Carillion
The stricken company, which employs 20,000 workers across Britain and hundreds in both Sheffield and Leeds, said crunch talks over the weekend aimed at driving down debt and shoring up its balance sheet had failed to result in the "short term financial support" it needed to continue trading while a deal was reached.

File photo dated 7/10/2008 of a sign of the cnstruction giant Carillion which has said that it has "no choice but to take steps to enter into compulsory liquidation with immediate effect" after talks failed to find another way to deal with the company's debts.

File photo dated 7/10/2008 of a sign of the cnstruction giant Carillion which has said that it has "no choice but to take steps to enter into compulsory liquidation with immediate effect" after talks failed to find another way to deal with the company's debts.

Carillion is a key supplier to the Government and has contracts in the rail industry, education and NHS.

The firm is involved in major projects like the HS2 high-speed rail line, as well as managing schools and prisons.

Carillion is also building the much-delayed tram-train project to connect Sheffield, Meadowhall and Rotherham. The project - the first of its kind in the UK - was originally due to be completed in 2015 but is still not finished and will cost around £75 million - after an initial estimate of £15m in 2012.

Read more at: https://www.thestar.co.uk/news/crisis-talks-over-future-of-company-that-employs-hundreds-in-sheffield-1-8956958

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."

The company is understood to have public sector or public/private partnership contracts worth £1.7 billion, including providing school dinners, cleaning and catering at NHS hospitals, construction work on rail projects such as HS2 and maintaining 50,000 army base homes for the Ministry of Defence.

As a result, the Government has been under increasing pressure to intervene to prevent the collapse of the company.

The Yorkshire Post says: Carillion, HS2 and Leeds - what next?
Unions are calling for urgent reassurances over the jobs, pay and pensions of thousands of workers following the "disastrous" news.

Officials from several unions representing workers on the railways, construction sites, prisons, hospitals and schools are seeking information from the company and ministers.

Rail, Maritime and Transport union General Secretary Mick Cash said: "This is disastrous news for the workforce and disastrous news for transport and public services in Britain.

"We have been warning since Thursday night that we thought the collapse of the company was imminent.

"The blame for this lies squarely with the Government who are obsessed with out-sourcing key works to these high risk, private enterprises.

"RMT will be demanding urgent meetings with Network Rail and the train companies today with the objective of protecting our members jobs and pensions.

"The infrastructure and support works must be immediately taken in house with the workforce protected.

"Transport Secretary Chris Grayling and his Tory colleagues must be forced to take responsibility for this crisis which is wholly of their making."

Carillion had met with lenders HSBC, Barclays, Santander and Royal Bank of Scotland on Wednesday to discuss options for reducing debts, recapitalise or restructure the group's balance sheet.

It was followed by a meeting on Friday between the Government, pension authorities and stakeholders in an attempt to thrash out a rescue package for the firm.

A petition launched over the weekend calling for Carillion to be nationalised had attracted more than 1,200 signatures.

Here is how construction giant Carillion announced it has gone bust:

"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 (chief executive) 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."

Read more:

Yorkshire jobs threat: Unions demand reassurances follow the collapse of Carillion
The Yorkshire Post says: Carillion, HS2 and Leeds - what next?