Carillion liquidation: Rivals circle for contracts from failed construction giantCarillion liquidation: Rivals circle for contracts from failed construction giant https://www.contractsadvance.co.uk/wp-content/uploads/2018/01/carillion-liquidation.jpg 768 513 Contracts Advance https://secure.gravatar.com/avatar/587ecdaccf01e2d8929840ef61884a15?s=96&d=mm&r=g
Rival builders were picking over the carcass of builder Carillion on Monday after the struggling firm’s dramatic collapse into liquidation.
The death of the company puts more than 40,000 jobs under threat, including 19,000 in the UK, as well as creating a major headache for the public sector because of all its contracts to build and maintain schools, hospitals, prisons and infrastructure. Thousands of smaller firms owed money by the firm have also been put at risk by the failure.
Carillion has been on a knife-edge since a disastrous profit warning six months ago shocked the City with huge write-offs on major contracts as well as the soaring scale of its debts and a £600 million pension deficit.
But today the firm succumbed to the inevitable after banks pulled the plug, and the Government refused to underwrite fresh loans to keep it afloat.
Shares were frozen at Friday’s price of 14.2p, valuing the firm at £61 million — a contrast with £1 billion a year ago.
Industry sources said a clutch of rivals would be examining specific contracts rather than bidding for separate divisions of the failed empire.
One major rival said: “The rail business is well worth looking at so if Network Rail picked up the phone you’d obviously have the conversation. Whether you would take the work on at the same price is a different kettle of fish.”
Carillion carries out up to £200 million of work for the rail operator, including bridge replacements and track renewals.
Another major builder said Carillion’s work with National Grid — designing and maintaining high-voltage power lines — could also be attractive.
Chairman Philip Green said the liquidation, to be handled by PwC, was a “very sad day for Carillion, for our colleagues, suppliers and customers” but a welter of small firms have more immediate fears over the knock-on effect.
The Federation of Small Businesses’ national chairman Mike Cherry, said: “It is vital that Carillion’s small business suppliers are paid what they are owed, or some of those firms could themselves be put in jeopardy, putting even more jobs at risk.”
Rudi Klein, chief executive of the Specialist Engineering Contractors’ Group, warned that the collapse should be taken as a “catalyst for change” in how the Government buys its construction projects.
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