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Carillion collapsed this morning after its banks lost faith in the construction company, throwing hundreds of major projects into doubt and forcing the government to step in to guarantee vital public services.

Carillion was forced into compulsory liquidation after costly contract delays and a slump in new business left it exposed with a growing debt pile.

Chairman, Philip Green, said: “In recent days 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. This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years.”

Employing 20,000 in Britain, Carillion has been fighting for survival since last July when it revealed it losses of more than £800 million. Further announcements identified Carillion debts and liabilities of  £1.5 billion.

PWC has been appointed as special managers by the Official Receiver and a special website has been set up to provide information. CLICK HERE TO VIEW PWC CARILLION WEBSITE.

The PWC Carillion website tells suppliers: “Unless advised otherwise, all agents, subcontractors and suppliers should continue to work and provide goods and services as normal, under their existing contracts, terms and conditions.

“You will get paid for goods and services you supply from the date of the Official Receiver’s appointment onwards. Over the coming days we will review supplier contracts and we’ll contact you concerning these soon.  Goods and services you supply during the liquidation will be paid for. A letter will be sent to suppliers shortly containing further instructions. In the first instance, please speak to your usual contact at the Companies.”

The PWC Carillion website also told Carillion’s clients that: “The Company (ies) continue to provide the services under  current contracts. The Special Managers will be working with company staff, and customers will be contacted individually to discuss ongoing arrangements.”

Commenting on this morning’s announcement that Carillion is to enter compulsory liquidation, Brian Berry, Chief Executive of the FMB, said: “Carillion’s liquidation is terrible news for all those who work for the company and it will have serious knock-on effects for the many smaller firms in its supply chain, some of which will be in serious financial danger as a result of Carillion’s demise.”

Berry concluded: “Carillion’s liquidation raises serious questions for the Government, not least about its over-reliance on major contractors. The Government needs to open up public sector construction contracts to small and micro firms by breaking larger contracts down into smaller lots. That way, it can spread its risk while also reaping the benefits that come from procuring a greater proportion of its work from a broad range of small companies. Construction SMEs train two-thirds of all apprentices and are a sure-fire way of spreading economic growth more evenly throughout the UK.”

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