With Midas Construction set to appoint Administrators, Scott Bebbington, Senior Manager at PKF Francis Clark highlights how this could affect you or your clients’ business and…
The news on Monday that Carillion had entered compulsory liquidation in a move that put 43,000 jobs at risk across the world came as a shock to most after the construction and facilities management giant failed to secure short-term financial support from stakeholders.
Now the repercussions of this are beginning to be felt with The Devon and Cornwall Business Council estimating that up to 200 jobs could be at risk in Devon and Cornwall from the collapse. The impact will also be felt in the supply chain and those affected by any bad debt of the company in the region.
Carillion is responsible for many construction and public services in the region, including the £27m Camborne to Redruth link road in Cornwall, and the North Quay redevelopment in Hayle. Six schools were rebuilt in Exeter by Carillion under a private finance initiative and they provide maintenance to Channings Wood, Dartmoor and Exeter prisons and provide infrastructure and housing services to the armed forces.
Sub-contractors and suppliers who are owed money by Carillion are at the end of the queue for payment and it will be a considerable time before they receive any money, or even know if anything will be paid. This is likely to cause financial difficulties for many, potentially leading to knock-on insolvencies.
Lucinda Coleman, Business Recovery Partner said:
“We are beginning to see the repercussions of this collapse. It is sadly the case that the liquidation is unlikely to be straight forward and will probably be protracted which will in turn have a significant impact on those affected by any bad debt of the company in the region. Now is the time for suppliers of Carillion to be proactive and seek professional advice early on to ensure their business survives, minimising the risks to directors and business owners within the Carillion supply chain.”
Creditors of Carillion can speak to one of PKF Francis Clark’s business recovery experts free of charge by calling 0800 832 1875.