Emergency talks to stave off collapse being held tomorrow
Emergency talks to try and prevent Carillion from collapsing into administration are due to take place tomorrow (Sunday).
Reports say the firm has just a matter of days to stave off going under as it struggles to convince financiers to come up with a rescue plan.
The firm is saddled with a £900m debt and a £600m pension deficit which has seen its worth collapse from close to £1bn last summer to just over £60m.
Carillion is trying to reach an agreement with creditors and on Friday was forced to put out a statement denying that its rescue plan was in tatters.
According to reports, the company has drawn up a plan that would see it being able to borrow significant amounts of new funding from its existing lenders if the government agrees to guarantee payments at certain stages of public sector contracts.
But ministers are believed to be against a complete bailout of the company – which carries out a host of public sector contracts – and are only lukewarm about guaranteeing payments once certain milestones have been reached.
Former business secretary Vince Cable, now the leader of the Liberal Democrats, said the government should not step in and spend public money rescuing a private firm.
He said: “They’ve got to force the shareholders and indeed the creditors, the big banks, to take losses, and then the government can take responsibility for taking the contracts forward and making sure they are delivered.”
On Friday, it was revealed that EY, the accountancy firm, had been placed on standby to act as administrator to Carillion.
On the same day, government officials and regulators met to discuss how to safeguard the interests of more than 28,000 pension scheme members. These talks took place 24 hours after a meeting of ministers from across a number of Whitehall departments discussed contingency plans for its collapse.
New Carillion chief executive Andrew Davies (pictured) is due to officially start in the role a week on Monday.