Some 43,000 jobs worldwide are likely to be affected by the collapse into liquidation this morning of construction giant Carillion.
The UK’s second biggest major construction company, Carillion failed to secure any kind of refinancing deal with its lenders or the government to cope with its huge debts and major losses on big contracts.
Workers have been told that they should continue to go to work and that they would still get paid, since the company is currently engaged in vital public sector contracts, such as the HS2 high-speed rail line, as well as managing schools and prisons.
It is the second biggest supplier of maintenance services to Network Rail, and it maintains 50,000 homes for the Ministry of Defence.
It is likely that Carillion's contracts will be taken on by other firms or taken back into the public sector, but there are no timescales for this yet.
High-profile developments the business worked on include the Royal Opera House, Channel Tunnel, the Library of Birmingham and the Tate Modern. Current projects Carillion is involved with include leading the £56 billion construction of the HS2 high-speed rail link and working with Network Rail on the Midland Mainline programme.
As well as these high-profile building projects, Carillion provides maintenance and facilities management services for both public and private sector customers, ranging from NHS hospital catering and cleaning services, maintaining 50,000 homes for the Ministry of Defence, through to providing school meals for children.
Carillion was part of the Tarmac Group until 1999, when it demerged from the business. By 2012, Carillion had an annual turnover of £5 billion. Last year, however, the company announced half-year losses of £1.15 billion and a pension deficit of £590 million.
Carillion first issued a profit warning in July 2017, after its average net borrowing increased above expected levels. The Board announced a comprehensive review of the business and began withdrawing from construction projects in Qatar, Egypt and the Kingdom of Saudi Arabia. Despite this, further profit warnings were issued in September, and again in November. Shares in the business fell 48% following November's warning, as the business said it expected to breach its loan conditions.