Carillion could enter administration on Monday unless United Kingdom backs rescue

Carillion could enter administration on Monday unless United Kingdom backs rescue

Carillion could enter administration on Monday unless United Kingdom backs rescue

Carillion said on Friday it remained in "constructive discussions" with its creditors and suggestions that they had rejected its business plan were incorrect.

EY, the accountancy firm, had been placed on standby to act as administrator to Carillion.

The firm is now under investigation by the Financial Conduct Authority over the "timeliness and content of announcements" made between December 2016 and July 2017.

Carillion also has major contracts to supply facilities management at 83 military sites in Scotland, as well as a 28-year contract managing the "elderly beds facility" at Glasgow's Queen Elizabeth University Hospital.

One source said: "This is not a normal restructuring - it's very political".

It comes as the Government, pension authorities and stakeholders met on Friday in an attempt to thrash out a rescue package for the firm which would help it avoid collapse.

Unite assistant general secretary Gail Cartmail, said: "The Government must consider all options while the future of Carillion hangs in the balance, including bringing contracts back in-house".

Scottish Labour's shadow economy secretary Jackie Baillie called on the Scottish Government to clarify the potential impact if Carillion collapses.

They added: "Based on our current trading assumptions (Dec' 18 EBITDA £188m with material downside risk) and our estimates of the mounting debt ( £1.1bn), likely additional supply chain funding/working capital unwind ( £300m) and pension liabilities (£600m), we now see no equity value".

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"The Government can't just do a financial bailout".

"In particular, we need to know that there is no threat to the cost and completion of the Aberdeen Western Peripheral Route, an issue I raised with the Cabinet Secretary months ago".

As well as its Scottish projects, Carillion is a major supplier to the UK Government and a key contractor in the first phase of building the £56 billion HS2 rail line.

The company provides vital services to hundreds of schools.

He said it was a "pretty messy situation", adding: "The situation is pretty bleak". It also has contracts in many other industrial sectors. The long-awaited route is due to be finished this year following lengthy delays.

Administration would put at risk the jobs "at least some" of the 19,500 people employed by the firm, Sky News said.

Further press reports earlier today said the government is being urged to bring Carillion into public control amid fears the construction company could collapse.

Carillion is holding crisis talks with United Kingdom government representatives on Friday, which Sky News said were aimed at safeguarding the more than 28,000 pension scheme members who face potential cuts to retirement payments should Carillion fail.

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