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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/jan/15/carillion-crisis-liquidation-last-ditch-talks-fail-business-live
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| Carillion goes into liquidation after last-ditch talks fail - live updates | Carillion goes into liquidation after last-ditch talks fail - live updates |
| (35 minutes later) | |
| Good news for commuters: | |
| Rail passengers reassured that their services will be running as normal today as Carillion's work for Network Rail does not involve the day-to-day running of the railway - @networkrail | |
| Carillion is the second biggest supplier of maintenance services to Network Rail, though, so its collapse is still a significant event. | |
| Pressure is mounting fast on the UK government to set up a full public inquiry into the collapse of Carillion. | |
| Jim Kennedy, Unite’s national officer for local government, says the company’s management must be held to account: | |
| “Public services, vast amounts of public money, thousands of jobs - including in a lengthy supply chain of insecure agency workers who are also at risk - and workers’ hard-saved pensions are all in danger of being dragged under by yet another bout of reckless corporate irresponsibility. | |
| “There are also serious questions that need to be asked and answered about Carillion’s conduct. | |
| “Did directors move to protect their bonuses before the financial stability of the company? | |
| “Has the company mushroomed because it built its business on unrealistic undercutting and blacklisting? | |
| “Why did the government continue to hand over public money to a company that had issued repeated profits warnings?” | |
| Labour’s Rebecca Long-Bailey also called for a ‘full investigation’ into the debacle, saying: | |
| “We’re ... asking for a full investigation into the government conduct of this matter. | |
| “This company issued three profit warnings in the last six months yet despite those profit warnings the government continued to award government contracts to this company.” | |
| Labour has called for an investigation into the Government's actions ahead of the collapse of construction and services company Carillion which has been forced into compulsory liquidation | |
| Financial analyst and journalist Louise Cooper is also struck by the decision to liquidate Carillion: | |
| Fact that it’s a liquidation (winding up) of Carillion and not going into administration (to come out eventually as smaller profitable firm) says a lot oboit underlying financials of firm.#Carillion | |
| Britain’s unions says that Carillion’s collapse shows the folly of employing private companies to provide services such as school meals. | |
| Rehana Azam, GMB National Secretary, explains: | |
| “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. | |
| “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. | |
| “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.” | |
| This is from Sky’s News’s Mark Kleinman: | |
| Compulsory liquidation of Carillion is the news we were anticipating over the weekend; effectively means there are no assets to sell so not a conventional administration. | |
| My colleague Rob Davies, who has been covering the Carillion story, tweets: | |
| Government will provide funding to ensure no interruption of services provided by Carillion, such as school dinners, hospital cleaning, maintenance of army base homes. Won't be cheap, particularly if it lasts a while. | |
| Less clear what happens to major unfinished projects such as Royal Liverpool and Midland Metropolitan hospital. Not clear joint venture partners are able to take over Carillion's share. https://t.co/gEjfZe5vRP | |
| Carillion’s collapse will send shivers through the UK economy. | |
| As well as employing around 20,000 people in the UK, the company also uses thousands of smaller companies to help provide its services. | |
| The BBC’s Joe Lynam says these firms must be very nervous... | |
| Thousands of small Carillion subcontractors will be v nervous now that they might not get paid their outstanding invoices. Carillion’s payment terms were often 120days. Will PWC honour those debts? | |
| The decision to liquidate Carillion means the government is effectively taking control of the company, says City expert George Trefgarne. | |
| Appointment of Official Receiver, answerable to Greg Clarke, means Carillion has effectively been nationalised | |
| ITV business editor Joel Hills calls the situation ‘highly unusual’. | |
| Carillion situation is highly unusual. Liquidation to be handled by the Official Receiver due to high number of government contracts. Not the usual administration process. Company is bust, shares will be suspended from trading at some point. | |
| Rebecca Long-Bailey MP adds that the government must ‘step in immediately’ to keep Carillion’s operations running. | Rebecca Long-Bailey MP adds that the government must ‘step in immediately’ to keep Carillion’s operations running. |
| That will give reassurance to workers that they will be transferred across into potential government institutions that will provide these services. | That will give reassurance to workers that they will be transferred across into potential government institutions that will provide these services. |
| It will also give comfort to those companies in the supply chain that rely on Carillion. | It will also give comfort to those companies in the supply chain that rely on Carillion. |
| "Taxpayer must not lose out" from Carillion going bust - @RLong_Bailey | "Taxpayer must not lose out" from Carillion going bust - @RLong_Bailey |
| Rebecca Long-Bailey, Shadow Secretary of State for Business, Energy and Industrial Strategy, is discussing Carillion’s collapse on BBC Breakfast. | Rebecca Long-Bailey, Shadow Secretary of State for Business, Energy and Industrial Strategy, is discussing Carillion’s collapse on BBC Breakfast. |
| She says the government should give a statement to parliament today, and must also explain why it allowed the crisis to blow up. | She says the government should give a statement to parliament today, and must also explain why it allowed the crisis to blow up. |
| Why did the government not act when profit warnings were issued? Why did they wait until the 11th hour to step in? | Why did the government not act when profit warnings were issued? Why did they wait until the 11th hour to step in? |
| Long-Bailey adds: | Long-Bailey adds: |
| What we don’t want to see happen is the government to take on those contracts which are making a loss, while those contracts that are profitable are simply sold onto another company. That’s not good enough. | What we don’t want to see happen is the government to take on those contracts which are making a loss, while those contracts that are profitable are simply sold onto another company. That’s not good enough. |
| We want all those [public sector] contracts to be brought back into public control. | We want all those [public sector] contracts to be brought back into public control. |
| The Guardian’s Business Today email has expanded its property coverage. | The Guardian’s Business Today email has expanded its property coverage. |
| As well as key news headlines, an agenda of the day’s main events, insightful opinion pieces and a quality feature, there is now more coverage of house prices, mortgages, the rental market – and the best picture galleries from our Money pages. | As well as key news headlines, an agenda of the day’s main events, insightful opinion pieces and a quality feature, there is now more coverage of house prices, mortgages, the rental market – and the best picture galleries from our Money pages. |
| For your morning shot of financial and property news, sign up here: | For your morning shot of financial and property news, sign up here: |
| Carillion’s chairman, Philip Green, says he deeply regrets the decision to put the company into liquidation. | Carillion’s chairman, Philip Green, says he deeply regrets the decision to put the company into liquidation. |
| But he insists there was no other option, after the company’s ‘stakeholders’ (ie, its bankers) declined to provide more short-term financial support over the weekend. | But he insists there was no other option, after the company’s ‘stakeholders’ (ie, its bankers) declined to provide more short-term financial support over the weekend. |
| Here’s the official statement from Green: | Here’s the official statement from Green: |
| “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years. | “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. | 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. | 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.” | 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.” |
| UK construction giant Carillion has spectacularly collapsed, after attempts to rescue the firm failed, putting thousands of jobs at risk. | |
| In the last few minutes, Carillion has announced that last-ditch talks over the weekend had not been successful. | In the last few minutes, Carillion has announced that last-ditch talks over the weekend had not been successful. |
| Its board have thus concluded that they have ‘no choice’ but to enter compulsory liquidation with immediate effect. | Its board have thus concluded that they have ‘no choice’ but to enter compulsory liquidation with immediate effect. |
| The government will provide funding necessary to keep Carillion’s contracts operating. | The government will provide funding necessary to keep Carillion’s contracts operating. |
| That’s an essential move, given the firm is involved in many public infrastructure projects - from transport and health to education and defence. | That’s an essential move, given the firm is involved in many public infrastructure projects - from transport and health to education and defence. |
| Breaking: Carillion to be put into liquidation with immediate effect after talks with govt and banks fail. Company says government will provide “necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff”. | Breaking: Carillion to be put into liquidation with immediate effect after talks with govt and banks fail. Company says government will provide “necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff”. |
| PricewaterhouseCoopers will now be appointed as ‘special managers’ to handle the collapse of the company, which employs over 40,000 people and runs a wide range of public sector contracts. | |
| As we reported last night: | As we reported last night: |
| The Cabinet Office hosted emergency talks on Sunday aimed at mapping out a future for a company that employs 43,000 people – including nearly 20,000 in the UK – but the meeting broke up without a rescue deal being announced. | The Cabinet Office hosted emergency talks on Sunday aimed at mapping out a future for a company that employs 43,000 people – including nearly 20,000 in the UK – but the meeting broke up without a rescue deal being announced. |
| The company’s bank lenders were considering a last-ditch appeal to fund a rescue plan, according to Sky News, but accountancy firm EY is standing ready to manage a potential administration process, which could be triggered as soon as Monday morning. | The company’s bank lenders were considering a last-ditch appeal to fund a rescue plan, according to Sky News, but accountancy firm EY is standing ready to manage a potential administration process, which could be triggered as soon as Monday morning. |
| Carillion’s collapse leaves the UK government facing some tricky questions about why it kept handing the company contracts in recent months, even after a profit warning that showed it was struggling. | |
| It also puts the wider policy of using private sector firm to deliver public services under the microscope. | It also puts the wider policy of using private sector firm to deliver public services under the microscope. |
| As Labour MP Rebecca Long-Bailey tweeted last night, there are a lot of questions to answer.... | As Labour MP Rebecca Long-Bailey tweeted last night, there are a lot of questions to answer.... |
| (1/3) Government must answer serious questions on their handling of Carillion contracts urgently. They must be prepared to bring public sector contracts back in house to ensure public services, employees, supply chain, tax payers and pension fund members are protected. | (1/3) Government must answer serious questions on their handling of Carillion contracts urgently. They must be prepared to bring public sector contracts back in house to ensure public services, employees, supply chain, tax payers and pension fund members are protected. |
| (2/3) In the last six months Carillion issued 3 profit warnings.In this time Government awarded three separate contracts to Carillion worth nearly £2 billion in total, despite gov policy to designate a company as “High Risk” and reconsider new contracts if profit warning issued. | (2/3) In the last six months Carillion issued 3 profit warnings.In this time Government awarded three separate contracts to Carillion worth nearly £2 billion in total, despite gov policy to designate a company as “High Risk” and reconsider new contracts if profit warning issued. |
| (3/3) it is clear this matter now requires full and transparent scrutiny and it is essential that shareholders and creditors are not allowed to walk away with the most profitable contracts while the taxpayer bails out loss-making parts of the business. | (3/3) it is clear this matter now requires full and transparent scrutiny and it is essential that shareholders and creditors are not allowed to walk away with the most profitable contracts while the taxpayer bails out loss-making parts of the business. |
| We’ll be tracking all the latest developments here.... | We’ll be tracking all the latest developments here.... |