Carillion lines up standby administrator as crunch talks continue

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Administrator firms PwC and EY were also reported to have been put on standby as talks about the firm's future carry on.

But it appeared there was little relief for the company, with the Press Association reporting lenders had dismissed a rescue plan proposed earlier in the week as it failed to present a solid proposition for restructuring the business.

It said the firm remained in constructive dialogue about short term financing while "longer term discussions are continuing".

Sky News has learnt that senior civil servants from the Cabinet Office are expected to attend an emergency summit that will also include representatives from The Pensions Regulator (TPR), Pension Protection Fund (PPF), Carillion's pension trustees and an assortment of City advisers.

Carillion, which is struggling under £900 million of debt and a £590 million pension deficit, denied the business plan had been rejected by stakeholders, but added that a restructuring could result in a debt for equity swap.

The rescue plan shown to lenders on Wednesday includes handing back some loss-making contracts, revising the terms of others and potentially accepting financial support from the Government if it can not secure it from private sector sources.

A collapse could be damaging as Carillion holds government contracts in the rail industry, education sector and NHS, and employs about 43,000 people across its worldwide business.

Aside from its construction business the company has many outsourced public sector contracts in health, education, the prison service and local authorities.

Unite assistant general secretary Gail Cartmail, said: "The Government must consider all options while the future of Carillion hangs in the balance, including bringing contracts back in-house".

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The rescue plan shown to lenders on Wednesday includes handing back some loss-making contracts, revising the terms of others and potentially accepting financial support from the Government if it can not secure it from private sector sources.

A government spokesperson said: "We can confirm that a ministerial meeting took place yesterday, 11 January".

Carillion met ministers from a wide range of government departments on Thursday to discuss contingency plans for the company's collapse.

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

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

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.

A Downing Street spokesman also said the Government was monitoring the unfolding situation. "It would be inappropriate for us to comment on any individual contractor's internal financial governance".

The firm's share price has plunged by more than 90% over the past year.

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