London: The boss of Carillion, the British construction firm which collapsed last month, apologised to lawmakers on Tuesday as he faced questions over a failure which put thousands of jobs at risk.
Carillion, which employed nearly 20,000 people in Britain, collapsed on January 15 when its banks halted funding, triggering Britain’s biggest corporate demise in a decade and forcing the government to step in to guarantee public services from school meals to roadworks.
“I’m truly sorry,” interim chief executive Keith Cochrane said. “It was the worst possible outcome. This was a business worth fighting for and that’s certainly what I sought to do during my time as chief executive.”
Under questioning from lawmakers Cochrane said that net debt was too high at the end of 2016 and the company was trying to reduce it before it faced a deterioration of cash flow after March 2017.
Meanwhile, another 452 jobs are to be cut at Carillion, the British government said on Monday, meaning about 5 per cent of the collapsed construction and support services company’s domestic workforce has been put out of a job so far.
The Official Receiver, which manages insolvencies for the British government, has since been looking through the about 450 contracts that Carillion was managing when it collapsed, seeking alternative contractors to complete the tasks.
The organisation said the job cuts announced on Monday were across the country and related to private and public contracts that were being managed by Carillion, as well as some back-office functions.
About 16,000 jobs still hang in the balance. So far, about 1,019 have been saved, while 829 redundancies have been made.
A government spokesman said the jobs saved had been transferred to other contracting companies.
He said the Official Receiver did not have an estimated time for when it would finish reviewing the contracts, adding they were being reviewed in the order that most supported the extraction of “business value” for Carillion creditors.
“These are obviously decisions that the receiver is taking, but we appreciate these are very difficult times for those people working at Carillion, and where the government can provide support we will, of course, do so,” Prime Minister Theresa May’s spokesman said.
The government, as well as private partners and lenders to the company, have announced measures to assist its employees and its suppliers, most of whom were not insured against losses.
Most recently, British Business Bank has agreed to provide up to £100 million ($141 million; Dh516.27 million) of lending to small businesses and workers affected by Carillion’s liquidation.