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Started by Policywatcher on 06-Jan-2018 22:26:15
Whither (or wither) Carillion?

https://news.sky.com/story/stricken-hs2-contractor-carillion-in-urgent-fight-for-survival-11197537

Carillion, which employs 19,500 people in Britain, has come up with a rescue plan which would involve handing back some loss-making contracts, revising the terms of others and potentially accepting financial support from the Government if it cannot secure it from private sector sources.

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bailliegillies - 07 Jan 2018 10:35:40 (#1 of 452)

It's too big too fail (and the shareholders need their dividends).

machiavelli - 07 Jan 2018 10:48:08 (#2 of 452)

After the pre-tax loss, I doubt they'll he getting one.

SharkPatoo - 07 Jan 2018 10:51:05 (#3 of 452)

Did it get asset stripped and used as a debt vehicle?

machiavelli - 07 Jan 2018 10:54:11 (#4 of 452)

Dunno. Nothing would surprise me.

Policywatcher - 07 Jan 2018 10:57:26 (#5 of 452)

Doesn't it hold a shedload of PFI deals on hospitals and schools?

machiavelli - 07 Jan 2018 10:57:53 (#6 of 452)

Betcha. Private efficiency in action.

Policywatcher - 07 Jan 2018 11:00:59 (#7 of 452)

Probably means that all the meat has been extracted from the biggest ones, and it's time for them to dump the expensive running costs back on the public purse then.

Bund02 - 07 Jan 2018 11:05:44 (#8 of 452)

Yes - this "handing back contracts" is a great wheeze. Heads I win; tails you lose.

Make lots of money = keep going. Don't make lots of money = let the taxpayer pick up the slack.

See also: rail franchising.

machiavelli - 07 Jan 2018 11:05:55 (#9 of 452)

PFI has been a failing of government procurement as much as crap/greedy megacorps. If the former was any good, the latter would find it hard to get a toehold.

Policywatcher - 07 Jan 2018 11:12:21 (#10 of 452)

Meh; it's only ever been a con trick played by the corporates on government, and by government on those right wing economists demanding that public expenditure not rise above arbitrary percentages of the economy, to meet some witch doctor economic theories that have since been shown to be bullshit anyway.

As well as a quick con trick for private companies to extract money from the public purse risk free, and a way to pander to the dumb knee jerk Tory belief that public spending is evil and inefficient, while the same spend plus profit plus dividends plus management costs plus other abuses (usually of the staff at the sharp end), for the same or reduced services is somehow great.

RosyLovelady - 07 Jan 2018 11:17:35 (#11 of 452)

I remember some wacky explanation that PFI "keeps things off-balance sheet" which means that government expenditure looks a great deal thriftier than it really is. Not that it's an example of what used to be called "creative accounting" of course, oh no, not possible.

Policywatcher - 07 Jan 2018 11:19:27 (#12 of 452)

Yep. That's how PFI satisfies the bit about keeping government spending below the percentage...

SinnerBoy - 07 Jan 2018 17:35:06 (#13 of 452)

What happens to the PFI debts, if the Government hold them to their legally binding responsibilities and they fold?

TinyMcOtter - 07 Jan 2018 17:44:11 (#14 of 452)

The government should nationalise all private companies involved in PFI contracts. No compensation to shareholders.

It was a scam and should be dealt with as such.

Let the fuckers sue and keep them in the courts for 20 years.

Policywatcher - 07 Jan 2018 17:46:16 (#15 of 452)

> SinnerBoy - 07 Jan 2018 17:35:06 ( #13 of 14)

> What happens to the PFI debts, if the Government hold them to their legally binding responsibilities and they fold?

Ultimately they end up on the public purse.

rearranged - 07 Jan 2018 19:16:34 (#16 of 452)

It's too big too fail (and the shareholders need their dividends).

Far bigger companies have failed and it's shareholders aren't getting dividends.

It had too many big contracts with small profit margins, and it borowed to fund them. If everything goes well they get a small profit. If it goes wrong they get a huge loss.

And the real problem for a company like this is that if you think a retailer may go bust you might still buy a pair of shoes or tin of beans from them because the risk is small. That may take the them past the difficult patch. But if you are worried a builder might go bust you won't go anywhere near them as the risk is enormous, and a small concern become a major disaster.

SheikYerbouti - 07 Jan 2018 20:37:52 (#17 of 452)

When you put it like that it's almost as though they're doing us a favour.

rearranged - 07 Jan 2018 20:43:06 (#18 of 452)

No, they are just a business. Just one with a flawed business plan.

Bund02 - 07 Jan 2018 20:45:30 (#19 of 452)

It's a bloody good business plan if the expectation is walking away when the gamble doesn't pay off (and then bidding for the next golden PFI ticket).

SharkPatoo - 07 Jan 2018 20:47:23 (#20 of 452)

Oh what a fucking surprise:

http://www.thisismoney.co.uk/money/markets/article-4873710/Carillion-protected-bosses-4m-bonuses-crisis.html

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