UK construction giant, Carillion, has gone into liquidation after a breakdown in talks between the company, the government and lenders broke down.
The company’s financial difficulties began last year, after the issuing of three profit warnings in five months and following the write down of more than £1 billion from various contracts contracts.
The firm’s subsequent collapse has led to fears over the losses of thousands of jobs. The company has 43,000 staff globally, with 20,000 of which based in the UK.
In the meantime, the government is to assume the responsibility of maintaining any public services previously run by Carillion.
In a statement to the London Stock Exchange, which the company is listed on, Carillion said: “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.”
“All employees should keep coming to work, you will continue to get paid. Staff that are engaged on public sector contracts still have important work to do,” said government minister David Lidington.
Carillion are involved in a host of large-scale projects across the U.K. These include the HS2 railway, 50,000 Ministry of Defence houses, Network Rail and around £200 million in prison contracts.
Philip Green, the company’s chairman, 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.
“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.”
As of currently, the company has racked up debts of approximately £1 billion and a £600 million pension deficit.
The Financial Conduct Authority (FCA) is currently investigating various announcements made between December 2016 and July of last year.