Should HM Gov' Bail Out Carillion?

mr_goo

I don't think they should. In my opinion they're only getting involved as it would impact on the delivery of HS2. Which is a complete waste of tax payers money.

mamba80

Mr Goo wrote:

Answers on a postcard.

No, private company, tough.

Private profits and big dividends but me the tax payer picks up the loses? xxxx right off.

should nt have been privatised to the extent it was, very wasteful.

mr_goo

mamba80 wrote:

Mr Goo wrote:

Answers on a postcard.

No, private company, tough.

Private profits and big dividends but me the tax payer picks up the loses? xxxx right off.

should nt have been privatised to the extent it was, very wasteful.

I agree. However they bailed out the banks. And this seems just as catastrophic. I'm in construction and there is an opinion that some companies are too big too go bust. Carillion are probably one of them.

I remember in the last recession that Taylor Wimpey shares plummeted to 7p.!! A colleague of mine said they are too big to be allowed to go bust. He bought a shed load of shares at 10p. I think that if one had money they can afford to loose then buy Carillion shares may be worth a punt.

surrey_commuter

Mr Goo wrote:

mamba80 wrote:

Mr Goo wrote:

Answers on a postcard.

No, private company, tough.

Private profits and big dividends but me the tax payer picks up the loses? xxxx right off.

should nt have been privatised to the extent it was, very wasteful.

I agree. However they bailed out the banks. And this seems just as catastrophic. I'm in construction and there is an opinion that some companies are too big too go bust. Carillion are probably one of them.

I remember in the last recession that Taylor Wimpey shares plummeted to 7p.!! A colleague of mine said they are too big to be allowed to go bust. He bought a shed load of shares at 10p. I think that if one had money they can afford to loose then buy Carillion shares may be worth a punt.

That is some ballsy investment advice.

Before anybody fills their boots they should check UK insolvency laws and do some heavy research into exactly what financial assistance the U.K. Govt gave Taylor Wimpey to stop them going bust.

If a public limited company would be a going concern without the debt then it is relatively easy to bust it out and start again. If this happens then shareholders lose everything.

And another thing... if buying these shares was a good idea then the smart money would already be in.

mamba80

Mr Goo wrote:

mamba80 wrote:

Mr Goo wrote:

Answers on a postcard.

No, private company, tough.

Private profits and big dividends but me the tax payer picks up the loses? xxxx right off.

should nt have been privatised to the extent it was, very wasteful.

I agree. However they bailed out the banks. And this seems just as catastrophic. I'm in construction and there is an opinion that some companies are too big too go bust. Carillion are probably one of them.

I remember in the last recession that Taylor Wimpey shares plummeted to 7p.!! A colleague of mine said they are too big to be allowed to go bust. He bought a shed load of shares at 10p. I think that if one had money they can afford to loose then buy Carillion shares may be worth a punt.

the collapse o the banking system would have far reaching effects for generation, Carillion going bust wont.

Perhaps the "too big to go bust" is why carillion have been paying dividends until very recently........

Did the Gov step in and rescue TW or was it a sell off and merger that saved them?

mr_goo

mamba80 wrote:

Mr Goo wrote:

mamba80 wrote:

Mr Goo wrote:

Answers on a postcard.

No, private company, tough.

Private profits and big dividends but me the tax payer picks up the loses? xxxx right off.

should nt have been privatised to the extent it was, very wasteful.

I agree. However they bailed out the banks. And this seems just as catastrophic. I'm in construction and there is an opinion that some companies are too big too go bust. Carillion are probably one of them.

I remember in the last recession that Taylor Wimpey shares plummeted to 7p.!! A colleague of mine said they are too big to be allowed to go bust. He bought a shed load of shares at 10p. I think that if one had money they can afford to loose then buy Carillion shares may be worth a punt.

the collapse o the banking system would have far reaching effects for generation, Carillion going bust wont.

Perhaps the "too big to go bust" is why carillion have been paying dividends until very recently........

Did the Gov step in and rescue TW or was it a sell off and merger that saved them?

Can't remember how TW dug themselves out.
I'm not advocating anyone to buy Carillion share's at all. I wouldn't myself. But I know some that might.

slowmart

I can’t see HMG back stopping Carillion as there are too many uncappped outcomes to weigh a political decision with such a small and delicate majority in Parliament.

More likely HMG will apply pressure on the debt holders ( the banks) to extend the line of credit to the point that assets can be sold in a controlled way and contracts run down or transferred.

No doubt a few bankers balls are being squeezed tonight

sungod

no

the banks were saved by the tax payers (not the government), and then used the opportunity to carry on paying themselves shitloads by using that cheap money to make a profit (mostly out of tax payers)

now they can take one for the country and keep carillion viable, long term, or at least until it can be wound down without massive damage to the employees (who paid for the banks) and suppliers (who paid for the banks)

no carillion exec should get a fat wad for walking/being riffed/sacked, no bung for being a good old boy, no fat pension, no bonus, claw back any bonus over the last 3 years (this was not an overnight failure), nothing more than statutory redundancy, and if proven culpable not even that

shareholders, caveat emptor

Pross

They should leave them go, Carillion weren't supporting all the small / medium Contractors they put out of business when they were aggressively winning public sector tenders. Now it seems they won that work without making sufficient contingency for fluctuations in costs and want help. Construction has become too dominated by a few giant corporations (house building is the same).

FishFish

If they go into insolvency then the creditors could go bust too. That is the issue. What might happen is that the creditors accept equity (shares) in return for the debt but this would increase the number of shares and correspondingly dilute the price of each one. I guess there are shareholders unable to trade this weekend but I'd sell them pdq on Monday - hopefully the pension funds are out - even if they were ever in!

I think the government should underwrite bank funding and nationalise some of the services that Carillion contract for the time being.

This is all a question of the least worst option - public, suppliers, banks, bank customers will suffer. The liquidators will gain if it goes that way.

I have to admit I made £600 share price scalping on the announcement of the rail contract last year!

...and then lost it playing the same game last week!

FishFish

sungod wrote:

no


no carillion exec should get a fat wad for walking/being riffed/sacked, no bung for being a good old boy, no fat pension, no bonus, claw back any bonus over the last 3 years (this was not an overnight failure), nothing more than statutory redundancy, and if proven culpable not even that

shareholders, caveat emptor

Their contractual payouts will be diluted by the same amount as creditors but as employees / Directors they will get priority if the company is liquidated. There will be clawback provisions but probably only last year.
You cannot punish the directors unless they have done something wrong - I guess a breach of fiduciary duty would be a promising route. Recall RBS.

Lookyhere

Should be allowed to go bust with all the effects that has on the directors, who ultimately, are to blame.

Other firms will snap up the business or the Government can nationalise, however, i suspect they ll be rescued, the directors will get large payouts, knighthoods handed out in next years NY honours list.

mr_goo

Pross wrote:

They should leave them go, Carillion weren't supporting all the small / medium Contractors they put out of business when they were aggressively winning public sector tenders. Now it seems they won that work without making sufficient contingency for fluctuations in costs and want help. Construction has become too dominated by a few giant corporations (house building is the same).

The big contractors 'buy' projects as the saying goes. Years ago I went to a meeting with a colleague at a nationally recognised main contractor to discusss the supply chain for a new secondary school in Swindon. The project manager's opening statement was that they were over budget on the scheme!
They actually hadn't even gone to site, only have just won the project. The only way that they could make the project pay was to tear the specification to shreds and build it with the cheapest materials they could get away with...... And that ladies and gentlemen is the whole story of Labours' Building Schools for the Future.

pblakeney

Pross wrote:

They should leave them go, Carillion weren't supporting all the small / medium Contractors they put out of business when they were aggressively winning public sector tenders. Now it seems they won that work without making sufficient contingency for fluctuations in costs and want help. Construction has become too dominated by a few giant corporations (house building is the same).

Damned right they weren't. Or their own suppliers.
My brother works for solicitors who are representing 2 companies who have already been forced to take Carillion to court over unpaid bills. Those 2 companies could go under, and that was before this week's announcements.

rjsterry

Having seen contractors go bust on a much smaller scale, the customers usually come off worst. Notwithstanding that Carillion don't merit any special treatment, the fact that HMG are up to their armpits in Carillion projects means they need to find some way to have them run down in a managed way. Not least so that subcontractors can get paid some of what they are owed as PB mentions.

mr_goo

It'll be interesting how HMGov handle the Army Basing project if Carillion go bump. It's a £1.1bn scheme under the banner of Aspire Defence which is 50/50 Carillion/KBR.

awavey

but thats the issue they were smaller scale Carillion directly employs 43,000 people, plus who knows howmany subcontracters and firms in the supply chain who rely on them. So if they go bust all that goes, hundreds of businesses could fail because of it, and that 580million pension deficit never gets filled, so thats all those pensions screwed and the state has to step in to help out anyway.

thats the thing the cost of Carillion going bust could have serious impact on a much wider scale than just some fat cats in a boardroom, we have to remember the reason why the government is so keen on things like HS2 is because its a massive engineering project that will provide employment and measurable impact on the economy for at least the next decade, it has very little to do with having a fast train set to play with. So if the cost to bailing them out is lower than the cost to the economy if they fail, its a no brainer and dogmatic politics be damned.

I cant see the government can let them fail, they either have to prop them up so they fail gracefully, or they have to bail them out, nationalise them to stop them making profit, and then move to awarding their contracts to other construction firms

rick_chasey

Had been a sinking ship for years.

Pross

awavey wrote:

but thats the issue they were smaller scale Carillion directly employs 43,000 people, plus who knows howmany subcontracters and firms in the supply chain who rely on them. So if they go bust all that goes, hundreds of businesses could fail because of it, and that 580million pension deficit never gets filled, so thats all those pensions screwed and the state has to step in to help out anyway.

thats the thing the cost of Carillion going bust could have serious impact on a much wider scale than just some fat cats in a boardroom, we have to remember the reason why the government is so keen on things like HS2 is because its a massive engineering project that will provide employment and measurable impact on the economy for at least the next decade, it has very little to do with having a fast train set to play with. So if the cost to bailing them out is lower than the cost to the economy if they fail, its a no brainer and dogmatic politics be damned.

I cant see the government can let them fail, they either have to prop them up so they fail gracefully, or they have to bail them out, nationalise them to stop them making profit, and then move to awarding their contracts to other construction firms

I'd settle for that final option and the public sector need to look at trying to expand their supplier base in the future. There also needs to be a review of mergers in the construction industry, not just among the contractor side but also consultants where the big boys have been consuming each other to the point where there are only a handful of major multi-discipline consultancies left. The awarding of very long term contracts also needs reviewing e.g. Balfour Beatty effectively run the vast majority of services for Herefordshire Council on a 20 year deal.

coopster_the_1st

If it is not a viable business it should be allowed to fail. The govt should be putting their efforts in to minimising the impact of the contracts they run and not how to keep the company running. The banks took the risk with this company, they should take a hit to their profits if it fails. No other outcome should be considered!

The tax payer should not be a guarantor due to poor decisions by management. It is bad enough that banks can approach business knowing they have this protection.

Frank Wilson

Never really rated them since Kayleigh.

Stevo_666

Frank Wilson wrote:

Never really rated them since Kayleigh.

sungod

guffaw!

rick_chasey

All the banks knew the deal with Carrillon. All they needed to do was read their own research.

It’s the name of the game.

Don’t see why they need to be held back from the consequences of their own decisions.

surrey_commuter

Well that answers the first question - now we get to find out if they should have intervened.

It could be a great opportunity to get out of some sh1t contracts but have no faith that the Govt won't be bending over to get farcked on the new contracts.

mr_goo

Well thats that for Carillion.
I've been working in construction for many years and this is the biggest failure. It does beggar the question if more are to follow.

Carillion chairman is Philip Green. Surely not?

rick_chasey

https://news.sky.com/story/carillion-ch ... s-10601631

The chairman of Carillion, the FTSE-250 infrastructure group, is in talks about a role advising the Prime Minister on responsible business as she plots a string of reforms to curb corporate misbehaviour.

bondurant

Mr Goo wrote:

Well thats that for Carillion.
I've been working in construction for many years and this is the biggest failure. It does beggar the question if more are to follow.

Carillion chairman is Philip Green. Surely not?

Different corporate slug

mr_goo

Bondurant wrote:

Mr Goo wrote:

Well thats that for Carillion.
I've been working in construction for many years and this is the biggest failure. It does beggar the question if more are to follow.

Carillion chairman is Philip Green. Surely not?

Different corporate slug

Must be something about that name and f***ing up the pensions of 'ordinary folk'.

john80

The directors and senior managers will be fine as most will have been getting paid a salary far in excess of their worth for some time under the illusion that they were worth it. Pay me 1 million a year and I don't have to work too long to be set for life. No director is at risk in the business if they don't put any of their own capital forward. Maybe we should be looking at directors being forced to borrow from a bank ten times their requested salary and put it into the company as an investment into the future success. That would really force the correct behaviours as in this situation the individual is bust as well as the company. The current model of big company bosses being paid is broken between risk and reward.

The government contracts can be let to others and the government should look at this to maximise taxpayer benefits through this process. Maybe getting a door fixed on a NHS hospital does not need a project manager, quantity surveyor and a meeting before the guy does it.

lostboysaint

Mr Goo wrote:

Well thats that for Carillion.
I've been working in construction for many years and this is the biggest failure. It does beggar the question if more are to follow.

Carillion chairman is Philip Green. Surely not?

Two more predicted.