Big UK government contractor sees shares plunge on debt woes

Carillion vans

Earlier this week, Carillion presented a revised business plan to scores of lenders - but contrary to reports, this was not expected to produce an instant agreement with them.

The developer tabled a business restructure plan on Wednesday but it is understood it failed to convince its lenders it was a strong enough proposition.

A spokeswoman for the Pension Protection Fund said it was "aware of the discussions between the company, government and banks and, along with the trustees and the Pensions Regulator, will act as it always does to protect the interests of Carillion scheme members and levy payers".

A collapse could be damaging as Carillion holds government contracts in the rail industry, education sector and NHS, and employs about 43,000 people across its worldwide business.

Carillion shares plunged on reports that it has lined up an an accountancy firm as a standby administrator if crunch talks about the outsourcing company's future fall through.

Trade unions have urged ministers to step in to protect the 19,500 jobs across Britain that are now at risk.

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.

It also won a contract a year ago to extend platforms at Edinburgh's Waverley Station.

The firm is part of the consortium building the Aberdeen Western Peripheral Road (AWPR).

Projects involving Carillion in Scotland also include the electrification of the central Scotland railway line through Shotts.


EY partner Lee Watson is now on secondment to Carillion acting as a director and the firm's chief transformation officer. "It would be inappropriate for us to comment on any individual contractor's internal financial governance".

Ministers are drawing up plans to take over prisons contracts worth £200m from Carillion, .

Mick Cash, general secretary of the Rail, Maritime and Transport (RMT) union, called for protection for workers "caught in the middle of this financial meltdown at Carillion".

The opposition Labour's Party's spokeswoman on business issues, Rebecca Long-Bailey, says the collapse of Carillion "would have major implications for the outsourced government contracts the company holds, as well as the firm's thousands of workers, those in the supply chain and those who rely on Carillion's pension fund".

'The collapse of Carillion could provoke a serious crisis'.

Asked if the government could take over Carillion's public sector contracts, he replied: "Of course the government will make contingency plans for many different situations, as you'd expect".

A Government spokesperson repeated a statement given to Sky News last weekend which said it was "committed to maintaining a healthy supplier market and work closely with our key suppliers".

"We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress", she said.

Carillion has struggled since reporting half-year losses of £1.15 billion., and a meeting is being held on Friday to discuss its pensions deficit. "It would be inappropriate for us to comment on any individual contractor's internal financial governance".

The Cabinet Office insisted it would not provide a "running commentary" on Carillion.

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