Sudden capsize of a construction giant

CARILLION’S financial problems started to hit the headlines last summer when it issued a profit warning and the chief executive resigned, since when it has only had interim leadership.

It posted a £1 billion, half-year loss in September which was followed a few weeks later but another profit warning.

Earlier this month, the Financial Conduct Authority stepped in to investigate the timeliness and content of announcements made over a seven-month period.

Carillion specialised in big private and public construction projects such as the Library of Birmingham which opened in 2013.

But it also provided services for the government such as school dinners and managing nearly 900 school buildings, cleaning and catering at NHS hospitals and maintaining 50,000 army base homes for the Ministry of Defence.

Last year, it was part of a joint venture awarded a £1.4 billion contract to build some of the tunnels on HS2, the new high-speed rail line between Birmingham and London.

It has public sector or public/private partnership contracts worth £1.7 billion.

The government announced it would put up the finance to ensure public sector contracts run by Carillion would continue to be delivered – it held around 450 which represented 38 per cent of its 2016 reported revenue – with staff encouraged to work this week as normal.

In addition, those former employees already receiving their pensions would continue to get payment.