Construction and catering firm Carillion goes into liquidation

16th January 2018 (Last Updated January 16th, 2018 13:55)

British multinational facilities management and construction services company Carillion, which serves meals to more than 200 schools, has been forced into liquidation.

Construction and catering firm Carillion goes into liquidation
Carillion’s collapse hangs 200 schools’ meal programme in limbo. Credit: Carillion PLC

British multinational facilities management and construction services company Carillion, which serves meals to more than 200 schools, has been forced into  liquidation.

Its catering services unit Food & More serves 32,000 meals a day to students.

Carillion offers meals, facilities management and maintenance services to schools in areas such as Leeds, Barnsley, Redcar, Oxfordshire, Gateshead and Tameside.

The 200-year-old Carillion lost money on big contracts and was saddled with debts of around £900m and a pension deficit of £590m.

Carillion held talks over the weekend with lenders for securing funding support, but the talks were unsuccessful.

The court has appointed Official Receiver as liquidator and partners at PwC as special managers.

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

“We understand that HM Government will be providing the necessary funding required by the Official Receiver to maintain the public services carried on by Carillion staff, subcontractors and suppliers.”

Following the failure of talks, the government now plans to offer funding to maintain the public services catered by the company.

The Guardian reported that firefighters are on standby mode to provide meals to schools as councils are making alternative arrangements after the company’s collapse.

Oxfordshire County Council will provide catering services to 90 schools in the county that were earlier provided by Carillion.

Oxfordshire county council director for property, assets and investment Alexandra Bailey said: “We expect school staff will be in work as normal today but if this doesn’t happen we will provide school lunches to schools needing support, and the fire service are on standby to deliver them. We are confident no child will go hungry at school.”

Prime Minister Theresa May’s spokesman Cabinet Office Minister David Lidington said: “It is regrettable that Carillion has not been able to find suitable financing options with its lenders but taxpayers cannot be expected to bail out a private sector company.

“Since profit warnings were first issued in July, the government has been closely monitoring the situation and has been in constructive discussion with Carillion while it sought to refinance its business.”