A general view of the Carillion company headquarters building in Wolverhampton, England on Monday, Jan. 15, 2018.Aaron Chown/The Associated Press
Carillion Canada says it is assessing the impact of the liquidation of its British parent company, but the Canadian division is operating as normal.
Carillion PLC filed for liquidation on Monday after failing to reach a financial restructuring plan with its lenders. The British construction giant had piled up debt totalling £1.5-billion ($2.57-billion) and the liquidation has put 43,000 jobs around the world in jeopardy.
Carillion's Canadian operations, which employ around 6,000 people, "are not in liquidation and continue uninterrupted," said company spokesman Cody Johnstone.
"Our employees, subcontractors and suppliers in Canada continue to be paid and we remain committed to delivering safe, quality services for our clients. Our Canadian leadership is currently assessing the situation and working with stakeholders to ensure continuity of operations."
Carillion Canada operates in the health-care, energy and transportation sectors. It has been involved in several hospital projects in Ontario, Saskatchewan and Nunavut.
The collapse of Carillion has caused a huge headache for the British government. As well as being one of the country's largest construction firms, it also held 450 government contracts to provide a variety of services to hundreds of schools, hospitals, prisons and military bases. The government has said it will take over those contracts and cover some of the liquidation costs. But it has ruled out a taxpayer bailout, leaving thousands of Carillion's construction employees worried about their jobs.
On Tuesday, Britain's Business Secretary Greg Clark announced there will be an investigation into the company's collapse, including looking into the actions of executives. "I have asked that the investigation looks not only at the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors," Mr. Clark said. "Any evidence of misconduct will be taken very seriously."
He has also called on Britain's Financial Reporting Council to probe the company's auditor, accounting firm KPMG.
Carillion spent months restructuring and scaling back unprofitable operations, particularly construction projects in Britain and the Middle East. It had also been trying to sell its Canadian health-care division as part of an effort to raise £300-million, something chief executive Keith Cochrane said was critical to the success of the restructuring.
Last July, Carillion attributed most of its problems to four projects in Britain and the Middle East as well as the cost of pulling out of Canada. That resulted in an £845-million writedown that set the stage for the eventual liquidation.
Paul Waldie