Things seem to keep going sour for embattled British construction company Carillion, with multiple reports saying it’s been hit by trade credit insurance woes.
The likes of Euler Hermes,
Tokio Marine HCC, and MGA Nexus have reportedly stopped writing new insurance coverage for the firm’s suppliers. Citing the
Insurance Insider, several publications said trade credit insurers have begun withdrawing support.
Meanwhile a report by
The Telegraph noted a bailout appeal following failed projects in the UK. Carillion, one of the biggest suppliers to the government, has had three profit warnings in less than six months and saw shares tumbling to an all-time low last Friday.
The report added that the contractor could be put into administration as soon as today in the absence of a restructuring deal.
Meanwhile Liberal Democrat leader Sir Vince Cable said the company should not have won government contracts amid the profit warnings. Cable described a bailout as a move that would “nationalise” Carillion’s losses.
“The government, and particularly the Department of Transport and Network Rail, have been handing out to them very big contracts knowing that they were fragile and there is a degree of recklessness here with public money that we need to have properly investigated,” Cable was quoted as saying to the
BBC.
Shareholders and creditors should shoulder most of the losses, he said.
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