- Carillion says it is in mortal danger despite positive discussions with its creditors
- The company is due to meet the government for crisis talks on Sunday
- Shares in Carillion plunged almost 30 percent to a new low on Friday
- The construction firm employs about 43,000 people worldwide
British building and services company Carillion could enter administration on Monday unless the government implements a rescue plan, sources told Sky News on Saturday.
Carillion said on Friday it remained in ‘constructive discussions’ with its creditors and suggestions that they had rejected its business plan were factually wrong.
Any collapse of Carillion, which provides services to government departments including justice, health and education, and has built hospitals, roads and rail lines, would be felt across Britain and also in Canada and the Middle East where the 200-year-old company has worked on numerous prestigious landmark projects.
Unions have called on the government to do everything it can to protect Carillion workers
Carillion is a major Government contractor in charge of building projects such as the HS2 rail project
Carillion declined to comment on Saturday’s Sky News report, which said government officials are due to meet on Sunday to discuss the company’s future.
Shares in Carillion plunged almost 30 percent to a new low on Friday after Sky News reported it had put administrators on standby, while an official told Reuters that creditors did not like the plan put forward.
Tensions over the future of Carillion have been rising for weeks and on Thursday ministers overseeing everything from justice to transport, health and education met to discuss how they should respond to the possible demise of a business that plays a central role in British public life.
Carillion has been left with debts of £1.5billion following an accounting scandal.
It also has a pension black hole of £587million that puts the retirements of 28,500 at risk.
Unions earlier this week called on the Government to do all it can to protect workers at the firm.
The firm employs about 43,000 people worldwide and also manages and maintains army and hospital buildings, roads in addition to swathes of Britain’s internet infrastructure.
Last July it revealed ballooning debts amid delays in collecting cash from clients, problems on contracts and a downturn in new business.
It issued three profit warnings last year amid falls in projected revenues and also faces an investigation by the City regulator Financial Conduct Authority into the information it divulged to shareholders in the run-up to its July trading update.
Carillion is playing a major role in the HS2 railway development