PwC assembles experienced team to handle Carillion failure
PwC is used to dealing with firms in distress but the collapse of the UK’s second largest construction company will test its abilities to the max.
While the High Court appointed the Official Receiver as liquidator of Carillion and its subsidiaries, it simultaneously appointed a series of special managers from PwC to assist with the process.
The special managers are some of the most experienced members of the firm, many of them having been involved with some of the region’s most high profile administrations.
They are headed by Matthew Hammond, Midlands regional chair, who negotiated the sale of Caparo when the industrial group lapsed into administration in 2015. Joining him is restructuring partner Michael Jervis, who worked on the administration of London black cab manufacturer Manganese Bronze, David Kelly, who worked on the administration of mobile phone retailer Phones4u, David Chubb, who was involved in the administration of AIM-listed Archial Architects, restructuring partner Peter Dickens and Russell Downs, who during his career worked on the collapse of MG Rover.
The companies included in the Carillion liquidation are:
• Carillion Plc
• Carillion Construction Limited
• Carillion Services Limited
• Planned Maintenance Engineering Limited
• Carillion Integrated Services Limited
• Carillion Services 2006 Limited
All are in compulsory liquidation with the special managers appointed to administer their affairs.
The Official Receiver’s priority is to ensure the continuity of public services while securing the best outcome for creditors.
Unless told otherwise, all Carillion’s employees, agents and subcontractors are being asked to continue to work as normal and they will be paid for the work they do during the liquidations.
PwC said there would understandably be concerns about the impact of the liquidations and it was therefore encouraging all parties to contact and engage with the companies concerned in the normal way.
“The special managers and teams from PwC will be supporting the companies and their employees in order to answer questions and minimise any disruption,” it said.
It added: “Unfortunately, as a result of the liquidation appointments, there is no prospect of any return to shareholders.”
It was left to new Cabinet Office Minister David Lidington to outline the Government’s position.
He said: “It is regrettable that Carillion has not been able to find suitable financing options with its lenders but taxpayers cannot be expected to bail out a private sector company.
“Since profit warnings were first issued in July, the government has been closely monitoring the situation and has been in constructive discussion with Carillion while it sought to refinance its business. We remained hopeful that a solution could be found while putting robust contingency plans in place to prepare for every eventuality. It is of course disappointing that Carillion has become insolvent, but our primary responsibility has always been keep our essential public services running safely.
“We understand that some members of the public will be concerned by recent news reports. For clarity – 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.”
He also reiterated that the private finance initiative remained fundamentally sound.
He said that since its inception in the 1990s, private finance had helped to deliver around £60bn of capital investment in infrastructure in the UK across a range of projects.
“We will continue to maintain partnerships with responsible firms in future,” he added.
