Should HM Gov' Bail Out Carillion?
mr_goo Posts: 3,770
edited January 2018 in The cake stop
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.
Always be yourself, unless you can be Aaron Rodgers....Then always be Aaron Rodgers.
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.
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.
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
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
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!
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.
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.
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.
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.
I am not sure. You have no chance.
Part of the anti-growth coalition
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.
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.
It’s the name of the game.
Don’t see why they need to be held back from the consequences of their own decisions.
It could be a great opportunity to get out of some censored contracts but have no faith that the Govt won't be bending over to get farcked on the new contracts.
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'.
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.
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