Construction giant Carillion is to go into liquidation, threatening thousands of jobs. The move came after talks between the firm, its lenders and the government failed to reach a deal to save the UK’s second biggest construction company.
Carillion ran into trouble after losing money on big contracts and running up huge debts. Its failure means the government will have to provide funding to maintain the public services run by Carillion.
“All employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do,” said government minister David Lidington said.
Carillion is involved in major projects such as the HS2 high-speed rail line, as well as managing schools and prisons.
It is the second biggest supplier of maintenance services to Network Rail, and it maintains 50,000 homes for the Ministry of Defence.
Carillion chairman Philip Green said it was a “very sad day” for the company’s workers, suppliers and customers.
The company has 43,000 staff worldwide – 20,000 in the UK. It is not clear yet how those staff will be affected.
Some of Carillion’s contracts will be taken on by other firms and some could be renationalised, according to BBC business editor Simon Jack.
Thousands of current and former staff have money in Carillion pension funds. Those funds will now be managed by the Pension Protection Fund (PPF).
The PPF said it was aware news of the liquidation would “raise serious concerns for all people involved”. “We want to reassure members of Carillion’s defined benefit pension schemes that their benefits are protected by the PPF.”