Following a weekend of talks with the British government UK construction company and government contractor, Carillion announced Monday morning that it had “no choice but to take steps to enter into compulsory liquidation (meaning that the assets of the company will be realized and distributed to the company’s creditors).
Carillion is responsible for a majority of the projects regarding the building of UK schools, NHS hospitals, roads and the upkeep of 50,000 homes for the Ministry of Defence along with another 450 government contracts. It also oversees 50 UK prisons, provides 32,000 school meals a day. The company was recently contracted to build the UK’s HS2 high-speed rail line and to maintain the countries Network Railway system. The Labour Parties Andy McDonald has accused the Conservative transport secretary Chris Grayling of having a “negligent and carefree approach” regarding the assigning of contracts. UK Minister for the Cabinet Office David Lidington told ITV/ITN “The Government’s job here is not to bail them out but to protect key public services and that’s what we’re doing.” Lidington is set to address the British House of Commons Monday Evening regarding the Carillion liquidation. The British government also has said that it awarded eight contracts to the company after it issued multiple profit warnings. ITV/ITN’s politcal editor Robert Peston told the News at Ten program “that more private companies (like Carillions) could shut down within a few months,” according to his sources.
The announcement comes after the company was “unable to secure funding to support our business plan” said chairman Philip Green on Monday. The company’s debt load totals over 1.15 billion British pounds and shortfall on of half a billion pounds regarding their pensions for there workers. Union Unite which represents Carillions 43,000+ worldwide (20,000 in the UK) employees has “called for an inquiry into the downfall,” of the company. As for workers in the UK some of them showed up to locked gates at there work sights Monday morning, one worker told BBC News ” ‘That’s it, go home.’ My company said, ‘You’ve been laid off.’ while another said “They’ve literally locked the gate. They’ve told us we can get our personal tools off the site if they’re small, but that’s it.”
Keep reading the Miller News Service for more on this developing story.
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