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Carillion: Government contractor enters compulsory liquidation 'with immediate effect' Carillion: Government contractor enters compulsory liquidation 'with immediate effect'
(35 minutes later)
Major government contractor Carillion has said it will enter compulsory liquidation with immediate effect. Major government contractor Carillion has collapsed into liquidation as a result of its lenders refusing to provide further support after months of financial woe. 
The construction giant’s board said it had “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. Following several days of tense negotiations, the construction giant’s board on Monday said that it had “no choice but to take steps to enter into compulsory liquidation with immediate effect’’. 
Carillion employs some 20,000 people in the UK and holds contracts for HS2, prisons, the NHS and the armed forces. The company has been plagued by substantial debt as a result of a slowdown in many of it markets. It's been forced to issue a string of profit warnings in the last year and is battling a gaping pensions deficit. 
The Government had been under increasing pressure to intervene to prevent the collapse of the company which is heavily involved with a number of key infrastructure projects. The departure of its chief executive last year also contributed to a major investor exodus, sending shares plummeting from around 230 pence a year ago to just over 14 pence at Friday's market close.
Labour will question ministers about how the situation was allowed to become so serious and the Unite union called for an inquiry into the crisis. Carillion employs some 46,000 people worldwide, of which 20,000 are in the UK, and holds major contracts for HS2, prisons, the NHS and the armed forces.
Meanwhile campaigners have demanded Carillion is not bailed out with public money. On Monday, the company said it had made “considerable efforts” to gain financial support in the short term. Crisis talks over the weekend, it said, had focussed on “options to reduce debt and strengthen the group’s balance sheet”.
But the company said that those discussions had "not been successful" leading the board to conclude "that it had no choice but to take steps to enter into compulsory liquidation with immediate effect".
It said that an application was made to the High Court for a compulsory liquidation before opening of business on Monday and an order was 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, Carillion's chairman, said the Government would pick up the bill to maintain the public services Carillion currently runs.
Ministers had been under increasing pressure to intervene to prevent the collapse of the company, largely because of its heavy involvement in key infrastructure projects.
Labour said that it would question the group about how the situation was allowed to become so serious and the Unite union called for an inquiry into the crisis.
Campaigners had also demanded Carillion not be bailed out with public money.
"The fact such a massive government contractor like Carillion has been allowed to go into administration shows the complete failure of a system that has put our public services in the grip of shady profit making contractors,” said Rehana Azam, GMB National Secretary.
"The priority now for the Government and administrators is making sure kids in schools still get fed to day - and our members still have jobs and pensions,” she added.
"There is no place for private companies who answer to shareholders, not patients, parents and service users in our public services. What’s happening with Carillion yet again shows the perils of allowing privatisation to run rampant in our schools, our hospitals and our prisons."
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