Black Country Chamber React to Carillion Liquidation
15 Jan 2018
Published in: Black Country Chamber of Commerce News
Black Country Chamber of Commerce is keen to support local businesses and workers following the breaking news that recent talks at Carillion to secure funding have not been successful resulting in the company announcing they are set to go into liquidation. The company employs around 20,000 people in the UK with around 400 of those jobs in Wolverhampton. Carillion is also at the head of an interconnected Black Country and West Midlands supply chain which will need guarantees from government and relevant business support organisations in the coming weeks and months.
With the UK headquarters in the Black Country, Corin Crane, Chief Executive of the Black Country Chamber of Commerce, commented: "Today is an extremely sad day for Carillion, but also for the city of Wolverhampton. Carillion is part of the fabric of the region, having operated in the heart of the Black Country for over 100 years. Our number one ask at this point is that decisions are made quickly, specifically regarding contracts that Carillion are already involved in.
"Not just in the Black Country, but across the UK, thousands of small businesses are involved in Carillion's supply chain - many businesses have already completed their work and are awaiting payment, whilst many are yet to begin work but have planned rigorously for it.
"At present, nobody knows the full extent of Carillion's liquidation, but there are absolutely plans for local partners to come together and help employees in any way we can."
Paul Forrest, Head of Research at Midlands Economic Forum, added: "British markets, and indeed politics, could experience some volatility as a result of the announcement. With leading UK Banks exposed to as much as Â£900 million in loans, a potential pensions deficit of an estimated Â£580 million but potentially rising to Â£800 million, press reports indicated the corporate required some Â£300 million by the month-end to secure its immediate cash flow. With the British public sector heavily dependent on services provided by Carillion, across a swathe of activities ranging from health, schools, security, defence and transport infrastructure, it is not simply a matter of supporting a bank rescue package, but ensuring the maintenance of essential public services and the employment of 43,000 staff, of which 20,000 are UK based.
"In 2016 Carillion reported sales of Â£5.2 billion, and prior to reporting loses of 1.15 billion last year, as of July 2017 it had a market capitalisation of close to Â£1 billion, which had fallen to Â£61 million at the end of last week. Nevertheless, it still has substantive and substantial medium-to-long-term contracts pipeline that should ensure its long-term viability, if its short-term cash flow could be secured. Recent changes to British state procurement policies have had an adverse impact on Carillion's ability to secure future contracts, and this may raise concern regarding similarly structure corporate vehicles. Moreover, it could undermine government fiscal projections on debt as well as bring Britain into conflict with the EU over any support package that breaches state-aid guidelines.
"As a key regional corporate, Carillion's HQ based in Wolverhampton, there must also be concern regarding local supply chains, especially of SME sub-contractors many of whom are already reported to be on 120-day terms."
If you would like business support, please contact the Black Country Chamber of Commerce on 0330 024 0820.
No comments have been submitted yet.
Post A Comment
You must be logged in to post a comment. Please click here to login.