Key UK contractor Carillion denies rescue plan in doubt

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Carillion is a major supplier to the Government and key contractor in the first phase of building the £56 billion HS2 rail line, but has seen its share price plunge almost 80% in the past six months after making a string of profit warnings and breaching its financial covenants.

"We are committed to maintaining a healthy supplier market and work closely with our key suppliers".

By 4.00pm, Carillion shares were down 29.4%, or 5.88p to 14.11p, having hit a low of 12.5p after the reports emerged, after being more modestly lower this morning.

"The company has kept us informed of the steps it is taking to restructure the business".

As Sky News revealed last weekend, without support from the Government, Carillion's syndicate of banks will not provide up to £300m of new funding required from the end of the month.

"Handing Carillion bosses a blank cheque bail-out is completely unacceptable", Ms Azam said, adding that the company had an "abysmal" track record on protecting workers.

The company was once valued above £2 billion but is now fighting net debts of more than £900 million, following a crisis sparked in July a year ago when it issued a profit warning, suspended its dividend, and said key contracts were not losing money as debt rose.

But bailing out a private company like Carillion, which paid out dividends to its shareholders past year, won't play well with taxpayers.

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"We will not comment further unless it becomes appropriate to do so".

If it survives in the short term, Carillion is also working on a plan to swap £1bn or more of its borrowings for new shares in the company, which is one of the Government's most important infrastructure delivery partners.

It has worked on key projects including the Royal Opera House in London, the Suez Canal road tunnel and Toronto's Union Station.

Further press reports earlier today said the government is being urged to bring Carillion into public control amid fears the construction company could collapse. This should include the possibility of bringing contracts back in-house.

Carillion has operations ranging from construction to catering, employing about 19,500 people in Britain.

Unite received assurances from Carillion after the company's share price plunge last November and was assured there was nothing to be concerned about.

The company was contracted to construct HS2, the high-speed rail link, although the costs of that project and Carillion's current state will prompt speculation regarding the project.

"If the Government is forced to institute a rescue package they need to also ensure that the supply chain is fully protected as many of these workers lack even the protection of basic employment rights, as they are employed on a bogus self-employed basis, through agencies and via umbrella companies".

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