Carillion

Carillion
source
Name	Carillion
Type	Public
Industry	Construction, Services
Fate	Liquidation
Founded	1999
Defunct	2018
Headquarters	Wolverhampton, United Kingdom
Key people	Richard Adam, Philip Green (businessman), Keith Cochrane

Carillion was a British multinational construction and facilities management company, founded in 1999 as a spin-off from Tarmac Group. The company was listed on the London Stock Exchange and was a constituent of the FTSE 250 Index, employing around 43,000 people worldwide, with operations in Canada, United Arab Emirates, Qatar, Saudi Arabia, and India, among others, and working with clients such as Network Rail, High Speed 2, and Ministry of Defence (United Kingdom). Carillion provided services to various sectors, including National Health Service (NHS), Department for Education, and Transport for London. The company's operations were also supported by partnerships with Balfour Beatty, Kier Group, and Costain Group.

● History

Carillion was formed in 1999, following the demerger of Tarmac Group's construction business, with Sir Neville Simms as its first chairman, and later led by Philip Green (businessman) and Richard Howson. The company expanded its operations through acquisitions, including the purchase of Mowlem in 2006, and Alfred McAlpine in 2008, and worked on high-profile projects such as the London 2012 Olympics and the Birmingham New Street railway station redevelopment, in collaboration with Arup Group, Atkins (company), and Laing O'Rourke. Carillion also partnered with Amey plc and Ferrovial to deliver various infrastructure projects, including the M25 motorway and the A1(M) motorway.

● Operations

Carillion's operations spanned multiple sectors, including construction, facilities management, and services, with a presence in various countries, including United Kingdom, Canada, United Arab Emirates, and Qatar. The company provided services to clients such as National Grid plc, Severn Trent Water, and Anglian Water, and worked on projects such as the Crossrail and the Thames Tideway Tunnel, in partnership with Bechtel Group, Bouygues, and Skanska. Carillion also collaborated with University of Cambridge, University of Oxford, and Imperial College London to deliver various research and development projects, and was a member of the Construction Industry Council and the Institution of Civil Engineers.

● Financial Difficulties

Carillion faced significant financial difficulties in the years leading up to its liquidation, with the company reporting a loss of £1.15 billion in 2017, and struggling with a debt of around £1.5 billion, which led to a decline in its share price and a loss of investor confidence, with HSBC, Barclays, and Royal Bank of Scotland among its major creditors. The company's financial struggles were also exacerbated by a series of profit warnings, and the departure of its chief executive, Richard Howson, who was replaced by Keith Cochrane, and later by David Hurcomb, with EY-Parthenon and PricewaterhouseCoopers providing advisory services to the company.

● Liquidation

Carillion went into compulsory liquidation on January 15, 2018, with Official Receiver appointed as the liquidator, and PricewaterhouseCoopers and Ernst & Young assisting with the process, which resulted in the loss of thousands of jobs, and significant disruption to the company's clients and suppliers, including Network Rail, High Speed 2, and Ministry of Defence (United Kingdom). The liquidation of Carillion also had a significant impact on the UK construction industry, with companies such as Balfour Beatty, Kier Group, and Costain Group affected by the collapse, and RIBA (Royal Institute of British Architects), Construction Industry Council, and Institution of Civil Engineers calling for greater transparency and accountability in the industry.

● Aftermath

The collapse of Carillion had significant consequences for the UK government, with the Department for Business, Energy and Industrial Strategy and the Department for Transport facing criticism for their handling of the situation, and the Public Accounts Committee and the National Audit Office launching investigations into the company's collapse, which also led to calls for greater scrutiny of private finance initiative contracts, and the role of big four accounting firms in auditing and advising companies, with Margaret Hodge, Frank Field (politician), and Rachel Reeves among the politicians who spoke out on the issue.

● Criticism

Carillion faced criticism for its business practices, including its use of supply chain finance and its treatment of small and medium-sized enterprises, with the Federation of Small Businesses and the Confederation of British Industry calling for greater transparency and fairness in the company's dealings with its suppliers, and the UK Parliament's Business, Energy and Industrial Strategy Committee launching an inquiry into the company's collapse, which also examined the role of KPMG, Deloitte, and PricewaterhouseCoopers in auditing and advising the company, and the impact of the collapse on the UK economy, with Bank of England, HM Treasury, and Office for National Statistics monitoring the situation. Category:Construction and civil engineering companies of the United Kingdom