Did you know that there is a version of The Construction Index for the USA? Visit the site No thanks
Follow us on Twitter Follow us on LinkedIn Follow us on Instagram
Daily construction news
Weekly plant news

Construction News

Fri February 23 2018

Related Information
Related Information
Related Information
Related Information

News » UK » Banks act to shore up Carillion suppliers » published 5 Feb 2018

Banks act to shore up Carillion suppliers

The first wave of redundancies from Carillion was announced on Friday but there is a further package of support for subcontractors and suppliers threatened by the company’s liquidation.

The Official Receiver, managing the liquidation of Carillion, has made 377 employees redundant but saved 919 jobs for now.

With support from all the major high street lenders, the British Business Bank is providing ‘up to’ £100m of lending to small businesses who may not have the security otherwise needed for conventional bank lending, using its Enterprise Finance Guarantee programme.

Carillion filed for liquidation on 15th January 2018. On the redundancies, a spokesperson for the Official Receiver said on 2nd February: “As part of the ongoing liquidation of the Carillion group I am pleased we have been able to safeguard the jobs of 919 employees today. Most staff are transferring on existing or similar terms and I will continue to facilitate this wherever possible as we work to find new providers for Carillion’s other contracts.

“Despite best efforts it has not been possible to secure the jobs of 377 staff, who will be made redundant. Those affected will be entitled to make a claim for statutory redundancy payments. The Jobcentre Plus’ Rapid Response Service stands ready to support any of these employees by providing advice and information so people can move into a new job as quickly as possible.

“I recognise that this will be a worrying time for all those affected, their families and local communities. I would like to thank all staff for their professionalism throughout the liquidation.

“I am expecting many employees working on other Carillion contracts to transfer in the coming weeks and we are continuing to keep the workforce updated as these are arrangements are finalised.”

The saved jobs include employees working on infrastructure, central and local government, and construction contracts who are transferring to new employers who have taken on this work. Approximately 150, for example, are moving to Kier, with whom they previously worked on joint venture schemes for Highways England. A further 51 are with the CEK joint venture with Kier and Eiffage, working on HS2.

The Enterprise Finance Guarantee programme, supporting Carillion supplies, is expected to benefit small businesses in Carillion’s supply chain that may not have sufficient assets as security to access conventional loans. These guarantees can be used to support overdraft borrowing and refinancing of existing debt.

The government is keen to give the impression that it is helping. Business secretary Greg Clark said: “We want to signal very clearly to small and medium sized businesses who were owed money by Carillion that they will be supported to continue trading. The banks have responded to my request by agreeing to support businesses and individuals affected. This further guarantee will help those businesses who may not be able to provide the usual security for a loan.”

British Business Bank CEO Keith Morgan said: “The Enterprise Finance Guarantee (EFG) is an important option for smaller businesses who need access to finance, but may not be able to meet a provider’s normal security requirements. To help in these exceptional circumstances, we have designed additional flexibility into EFG that could be particularly suitable for firms in the Carillion supply chain. We would encourage lenders to work with their customers to use these new flexibilities to meet their needs.”

This package is in addition to the more than £200m already announced by Lloyds, HSBC and RBS.

 

 

MPU

Download our free construction news iPhone / iPad app. Sign up to our FREE email newsletters or subscribe to our RSS feed for regular updates on the latest Construction News, Plant News, Contract News & Supplier News. The Construction Index also provides the latest Construction Tenders, Construction Market Data & Construction Law Commentary all FREE.

This article was published on 5 Feb 2018 (last updated on 5 Feb 2018).

More News Channels