Carillion Canada gets protection from creditors

After the collapse of its UK parent last week, the Canadian division of Carillion was granted protection from creditors yesterday because of "unexpected liquidity challenges".

Employing more than 6,000 people, Carillion Canada and related entities have a month to "stabilise their operations" after seeking protection from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (CCAA).

The defensive move came 10 days after Carillion Canada assured customers and staff it was not in liquidation and that operations "continue uninterrupted".

It has now reiterated that assurance. "The CCAA filing is not a bankruptcy or liquidation filing," Carillion Canada said on its website, adding: "It is expected to be business-as-usual for all Canadian Carillion [business units] as they continue to operate under the protection of the Initial Order."

Carillion Canada is active in Canadian hospital and infrastructure projects, and holds facilities management contracts in the public and private sectors.

The CCAA filing protects the company from creditors for an initial one month period that can be extended if the court deems it appropriate.

Entities protected include Carillion Construction Inc., Carillion Canada Inc., Carillion Canada Holdings Inc., and Carillion Canada Finance Corp., called "applicants" in the legal terminology.

"The Canadian Carillion Applicants do not anticipate any disruption to the various services they provide and do not expect that this protective filing will impact the public in any way," Carillion Canada said.

"Public safety remains our top priority, be it in the maintenance and cleaning of hospitals, the clearing of roads or any of our other activities."

The compulsory liquidation of UK-based Carillion plc on 15 January sparked fears that 6,000 jobs in Canada were on the line.

Those fears will not have gone away, but the surviving Canadian unit said it was exploring "available options".

"The Canadian Carillion Applicants intend to use the protection afforded to them by the Initial Order to stabilise their operations and address their short and long term liquidity challenges while they explore the available options," the company said.

Not all of the Canadian business units were included in the CCAA filing, and their fate remains uncertain.

The company said its Outland, Rokstad, and Carillion Services entities, and Carillion’s Public Private Partnerships, are not parties to the CCAA proceedings, but added that "a limited stay of proceedings has been extended for their benefit to ensure the orderly continuation of their day to day operations".

Image: Carillion used this image to illustrate its role as provider of support services to the oil and gas sector in Canada (Carillion)

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