Carillion knocked back over business plan as crunch meeting looms

Carillion knocked back over business plan as crunch meeting looms

Ministers are drawing up plans to take over prisons contracts worth £200m from Carillion, .

Meanwhile the union Unite is calling on the Government to consider all possible options including bringing contracts in-house, as doubts continue to grow over the future of troubled construction and outsourcing giant Carillion.

"Handing Carillion bosses a blank cheque bail out is completely unacceptable - company bosses should not be rewarded for failure with public money", it said in a statement.

"As part of its engagement with stakeholders", the company continued, "Carillion is in constructive dialogue in relation to additional short term financing while the longer term discussions are continuing".

Any agreement was likely to involve the raising of new capital and the conversion of existing debt to equity, which would result in "significant dilution to existing shareholders", it said in a statement. The company is in crunch talks over its future with ministers and the Pensions Regulator.

The company is the UK's second-largest construction company and a key government contractor. The company, which employs 43,000 people worldwide, has also been hit with numerous profit warnings.

It also supports schools with health and safety and grounds maintenance.

A spokesman for Prime Minister Theresa May said on Friday the government was monitoring the situation and had drawn up a contingency plan after the 200-year-old group asked creditors for more time to tackle its debts.

Last night Scottish Labour's shadow cabinet secretary for the economy, Jackie Baillie, said the Scottish Government needed to give reassurances over what would happen to the Aberdeen Western Peripheral Route (AWPR) if Carillion collapsed.

In addition to its rail operations, Carillion also manages almost 900 schools, provides services to the NHS and works with National Grid.

A Government spokeswoman said: "Carillion is a major supplier to the Government with a number of long-term contracts".

The company held talks with its lenders and advisers in London on Wednesday.

Earlier this week, Carillion presented a revised business plan to scores of lenders - but contrary to reports, this was not expected to produce an instant agreement with them.

Cabinet Office minister David Lidington hosted the summit of senior figures including Business Secretary Greg Clark and Chief Secretary to the Treasury Liz Truss.

Apart from the NHS, Carillion has a contract for work on the HS2 rail link and is one of the leading suppliers of rail infrastructure services in the UK.

"We are committed to maintaining a healthy supplier market and work closely with our key suppliers".

Carillion was forced to ask its banks, which include Santander UK, HSBC and Barclays, for support after breaching its loan agreements past year when it issued a series of profit warnings.

Carillion, which has had to contend with a slowdown in many of its major markets, has seen its share price plummet from 230p a year ago to less than 15p on Friday.

Government officials and regulators will be holding crisis talks today aimed at safeguarding the interests of more than 28,000 pension scheme members who could face cuts to retirement payments if Carillion does not survive.