Carillion liquidation creates waves of uncertainty for catering industry

Carillion’s collapse could have a knock-on effect for the catering equipment supply chain.

CESA has responded to the liquidation of Carillion, stating that it is “tracking developments” closely as speculation grows that its collapse could hit the catering industry hard.

It has been reported that Carillion, which went into liquidation yesterday morning, has run up debts of around £1.5bn after losing money on big contracts.

Officials at CESA are currently looking to gain a clearer picture of proceedings as fears mount that the construction giant’s collapse will have a knock-on effect for catering equipment suppliers and distributors.

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Glenn Roberts, chair of CESA, which represents more than 190 companies that supply, service and maintain commercial catering equipment, said that Carillion’s liquidation could have a “huge impact” on the foodservice equipment community.

“CESA will be lobbying government and, at the earliest opportunity, we will discuss the matter with the administrator in order to try to minimise the negative effects on the supply chain,” he said.

“Given the number of high profile projects that are at various stages of completion, the operational issues relating to existing contracts, and the equipment service agreements, it is vital that the interests of CESA members are protected. They find themselves involved in this situation through no fault of their own, and it will be unfair if their businesses and employees are adversely affected as a result. We are tracking developments very closely.”

According to correspondence issued by the High Court this morning, the Official Receiver’s priority is to ensure the continuity of public services, while securing the best outcome for creditors.

It stated: “Unless told otherwise, all employees, agents and subcontractors are being asked to continue to work as normal and they will be paid for the work they do during the liquidations.”

The Official Receiver was appointed liquidator of Carillion by the High Court and is being supported by a team of six ‘special managers’ from PwC to help manage the company’s affairs, business and property.

Contractors are being encouraged to contact and engage with Carillion companies in the normal way. In the first instance this includes contacting their usual contacts at the firm.

“This is a sorry state of affairs that seems to have been caused by an overwhelming drive to reduce costs to an unsustainable level,” added Roberts.

“For example, there has been next to no input on equipment energy efficiency and lifecycle costs.”

Carillion employs 43,000 staff worldwide, with around half of its workers based in the UK, and is involved in major UK projects, including the HS2 high-speed rail line, as well as managing schools, hospitals and prisons. Its Food & More catering business offers catering services to the business and education sectors, providing meals to more than 200 schools.

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One Comment;

  1. ERIC HUNTER said:

    No doubt many of the directors will have had their bonuses etc. and will reform in other companies as directors re-branded. Just like many of the catering design companies who have done the same, but shafted their sub-contractors and/or suppliers for thousands and then the directors within weeks pop up as directors in other newly formed companies or established companies set to do the same again.
    Why does the law let this happen time and time again it smacks of fraudulence or at best gross incompetence, just like football mangers the worse you perform the more money you get along with a promotion.

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