British multinational facilities management and construction services company, Carillion has fallen into administration, as lenders have refused the £300m required to keep the firm afloat. It was valued at £1.6bn and is now worth £61m.
The company, which employs 43,000 staff around the world, 20,000 in the UK, has been put into the hands of the Official Receiver with PricewaterhouseCoopers appointed as special managers to wind down the business.
Headquartered in Wolverhampton, Carillion, which struggled with debts of around £900m and a pension scheme deficit of around £580m, faced cost overruns on a number of contracts in the UK and Middle East.
The company provides full facility management services including catering, serving 32,000 meals per day at 900 schools, and hospital meals. Mid-December, Carillion had agreed to sell a large part of its UK healthcare facilities management business to Serco for £47.7m.
Carillion is currently leading the HS2 construction and maintaining 50,000 army base homes for the Ministry of Defence
Chairman Philip Green said he expected the government to step in and provide the necessary funding to maintain the service contracts on UK roads, hospitals and prisons held by Carillon and to minimise the disruption to its subcontractors and suppliers.
He continued, ‘This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years.
‘Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future and the board is very grateful for the huge efforts made by Keith Cochrane, our executive team and many others who have worked tirelessly over this period.
'In recent days however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.’
