Government in crisis talks over company that provides vital services to schools

Carillion's city centre headquarters on the Ring Road St Marks in Wolverhampton

Criticising the Government's dealings with the company, Mr Cable told BBC Radio 4's Today programme: "The Department of Transport seemed to be handing out contracts to keep Carillion going even though there had been profit warnings, even though there was a very high risk of this company going down".

Carillion could crash into administration as soon as Monday if the Government does not back a rescue plan, Sky News learns.

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.

Carillion PLC (LON:CLLN) shares dropped by almost 30% in late afternoon trading on reports that its lenders have rejected the embattled construction firm's business plan, and that it has lined up an accountancy firm as a standby administrator.

"As part of its engagement with stakeholders, Carillion is in constructive dialogue in relation to additional short term financing while the longer term discussions are continuing".

Government officials and regulators will hold crisis talks on Friday aimed at safeguarding pensioners' interests at Carillion, the vast construction group which is racing to avoid collapse.

"The government remains supportive of Carillion's ongoing discussions with their stakeholders", Blain said.

Senior civil servants from the Cabinet Office attended an emergency summit that included representatives from The Pensions Regulator (TPR), Pension Protection Fund (PPF), Carillion's pension trustees and an assortment of City advisers.

Carillion has a pension deficit of roughly £580m, although this figure would be expected to rise sharply if measured according to the cost of insuring its various retirement schemes on a full buyout basis.


Sky News revealed last weekend that Carillion needs hundreds of millions of pounds within weeks to survive.

The crisis at Carillion deepened on Friday after reports that lenders had effectively rejected a rescue plan and that two of the Big Four accountancy firms were preparing to act as administrators.

Having had its rating for Carillion "under review" previously, the City broker has resumed coverage with a "sell" saying it now sees no equity value in the stock.

A number of disposals aimed at raising cash, including that of its Canadian operations, are progressing more slowly than originally anticipated.

The company is fighting net debts of more than £900 million, following a crisis sparked in July past year when it issued a profit warning.

A spokesman for Prime Minister Theresa May said on Friday the government was monitoring the situation and had drawn up a contingency plan after the 200-year-old group asked creditors for more time to tackle its debts.

Since then, the company has cleared out its executive team, including chief executive Richard Howson and finance director Zafar Khan.

Carillion's fight for survival is being led by interim boss and industry veteran Keith Cochrane, a former CEO of engineer Weir Group.

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