It will probably come as no surprise at this point about Carillion entering into Compulsory Liquidation.
It certainly was a surprise at the beginning of the week when the news finally broke. Despite initial profit warnings being expressed in July 2017 by Carillion – it was thought that such large multi-faceted contractor with a number of significant high profile Government contracts would make it.
A very worrying prospect for many of Carillion’s suppliers and sub contracting organisations with payment fears. Thankfully 90% of the company’s private sector service customers have confirmed that they would like Carillion to continue to provide services for the meantime until new suppliers can be found. They will be providing funding which allows the retention of employees working on those contracts.
The collapse of Carillion has brought about curiosity as to why both ministers and civil servants agreed to hand the company further work following July’s profits warning. They were underperforming on contracts due to unexpected occurrences at each project, causing them to swiftly run into debt of £900m, and needing an injection of cash, they were turned away by the Government and banks.
Its a worrying prospect for many, especially for Carillion’s employees and sub-contracting teams and we know something that has already affected our clients. Sad times indeed for the Construction Industry.