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Carillion set to go into liquidation after last-ditch talks collapse

15 January 2018

Following emergency meetings with its lenders over the weekend, hosted by the Cabinet Office, no solution has been found and Carillion is reported to be heading for liquidation.

Reports in all the major news outlets this morning have featured the story, with considerable focus placed on the level of debt accrued by the business.

This is said to have reached a total of around £1.5bn, including more than £600m in pensions deficits.

The fund will now be managed by the Pension Protection Fund, which has said it will protect workers' benefits, according to the BBC.

Concerns have been raised for the welfare of the company's 20,000 UK staff, along with its other employees around the world.

Although many of its contracts will continue with other providers, with staff transferred to new employers under TUPE regulations, it is unclear how many will lose their jobs and how safe their pensions are.

The picture for the Carillion supply chain is less clear and today's news will be a major blow for many, especially for those with retention funds or large amounts of overdue payments.

Questions are now being asked on a number of levels, including why the government continued to grant new contracts to Carillion after it issued numerous profit warnings last year.

Labour shadow business secretary Rebecca Long-Bailey was quoted by the BBC as saying the company's loss-making contracts should not be taken on by the government, while the profitable ones were sold to private companies.

The news was described as "disastrous" by RMT union general secretary Mick Cash, along with other union representatives seeking reassurances on workers' futures.

In addition to the level of debt accrued, questions are also being asked about the government's procurement process.

Further announcements are now awaited over the details of the Carillion liquidation.

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