The British construction and services group Carillion announced on Monday that it has been “forced liquidation with immediate effect”. The collapse of Carillion comes after failed negotiations this weekend with its creditor banks, including HSBC, Santander UK and RBS, to get a new line of credit worth £300 million (338 million euros).
“Despite considerable efforts, those discussions have not been successful, and the board of Carillion has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect,” the company said in a statement.
Shares in the construction and services group, which has a workforce of some 43,000 workers, were suspended before the opening of the London Stock Exchange this morning as the application for the liquidation of the company was filed with the courts.
Carillion’s net debt is around £900 million (1,013 million euros) with a pension deficit of £580 million (653 million euros), while its stock market valuation has fallen below £100 million (112 million euros), after its shares dropped by 90% last year.
“It’s a very sad day for Carillion,” acknowledged Philip Green, president of the company, who highlighted the “enormous efforts” made in recent months to restructure the company. “In recent days, however, we have been unable to obtain funding to support our business plan and, therefore, with the deepest regret, we have reached this decision,” he added.
The British construction company, responsible for emblematic buildings such as the Royal Opera House and the Tate Modern gallery, is also in charge of providing public services to hospitals, schools, prisons and railway companies. Last July it was awarded contracts for the construction of the high speed rail (HS2) line that will connect London with the north of England.
The British Government will provide the necessary financing for the maintenance of public services carried out by Carillion until it can find other providers.