UK contracting and services giant Carillion will now go into liquidation after weekend talks with the government failed to secure a necessary financial lifeline.
Its chairman Philip Green called it a "very sad day" in a 7am statement today to the London Stock Exchange.
The statement said that government would pay to maintain the public services outsourced to Carillion, potentially saving thousands of jobs.
But the fate of staff in its commercial contracting operations in the UK and around the world is not yet known.
Employing 43,000 people in total, Carillion manages nearly 900 school buildings in the UK, is the second-largest supplier of maintenance services for Network Rail, and holds £200m worth of prison contracts. It also maintains 50,000 homes for the Ministry of Defence.
An application was made to the UK High Court for a compulsory liquidation of Carillion before opening of business today and an order has been granted to appoint the Official Receiver as the liquidator, Carillion said.
The company said it expected PricewaterhouseCoopers to be appointed as Special Managers, to act on behalf of the Official Receiver.
"Carillion continued to engage with its key financial and other stakeholders, including Her Majesty’s Government (‘HMG’), over the course of the weekend regarding options to reduce debt and strengthen the group’s balance sheet," the statement said.
"As part of this engagement, Carillion also asked those stakeholders for limited short term financial support, to enable it to continue to trade whilst longer term engagement continued.
"Despite considerable efforts, those discussions have not been successful, and the board of Carillion has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect."
Philip Green, Chairman of Carillion, 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. Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future and the Board is very grateful for the huge efforts made by Keith Cochrane, our executive team and many others who have worked tirelessly over this period.
"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."
Image: The fate of staff in Carillion’s commercial contracting operations in the UK and around the world is not yet known (Carillion)
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