Carillion’s collapse is expected to cost Balfour Beatty up to £45m this year, the infrastructure group has announced
Carillion, which employs around 43,000 people worldwide, is set to go into compulsory liquidation after rescue talks failed.
In a statement to investors, Balfour Beatty said it is in joint ventures with Carillion on three projects: the £550m Aberdeen Western Peripheral Route in north-east Scotland, the A14 in Cambridgeshire and the M60 Junction 8 to M62 Junction 20 scheme.
It added that it will continue to work with its clients and meet its contractual commitments.
“The cash impact to Balfour Beatty is likely to be an outflow in the range of £35m to £45m in 2018,” the company said.
“Balfour Beatty does not have any other material exposure to Carillion.”
Elsewhere, Galliford Try, which is also part of the joint venture delivering the Aberdeen Western Peripheral Route contract, said Carillion’s collapse is expected to cost it between £30m and £40m.
The outstanding contribution for the project from Carillion is between £60m and £80m, with the shortfall set to be funded equally by the other JV members.
Build UK has also released a statement regarding Carillion’s collapse, which reads:
‘This is a very sad day for construction and the impact of Carillion entering liquidation will be felt throughout the whole supply chain.
‘Carillion Construction Ltd. was a Build UK Contractor member and we are in on-going dialogue with the Government, providing information to support its decision making. To assist us in understanding the impact across the supply chain, we are collating information on the supply chain’s exposure across various sectors. In particular, how much money businesses are owed and what percentage of their total revenue this represents. Please send any information, which will be treated in the strictest confidence, to info@BuildUK.org.
‘Today’s news raises further serious questions about the construction industry’s business model and Build UK is committed to working with the industry and its clients and investors to learn lessons and embed change through the supply chain.’