The UK's second-largest construction company is to go into liquidation, following the failure of last-minute rescue talks between UK government representatives and the firm's lenders.
Carillion, which undertakes a significant amount of public sector work, is heavily involved in the UK's HS2 high-speed rail project, as well as being a major supplier of maintenance services to Network Rail. The firm currently has around 20,000 employees in the UK and a total of 43,000 worldwide.
It is reported that the firm's debts of around GBP900 million (USD1.2 billion) have largely been accrued due to cost overruns on a number of major contracts.
Many of the company's current subcontractors could now face a long wait for payment as Carillion's assets are sold. The UK construction firm Balfour Beatty is working on three joint venture highway projects with the firm and said that meeting its contractual obligations will lead to a cash outflow of up to GBP45 million (USD62 million).
The UK government is expected to fund the continuation of public services formerly undertaken by Carillion.