Reply to post: RE: Carillion

Just can't catch a break, can ya, Capita? Shares tumble 40% amid yet another profit warning

Anonymous Coward
Anonymous Coward

RE: Carillion

My reading of the issues with Carillion was that it failed to deliver a number of large projects, largely for the public sector, on time and attempted to use debt to cover the period between expected payments and the actual payments. As the gap between the two dates became wider and the amount being covered became larger, they run out of time and creditors called time on their loans.

I think there may have been some justification for a "government rescue" in the form of bringing forward payments to allow work to be finished as the likely cost as a whole (work either not getting done or taking significantly longer, suppliers not being paid, redundancies and work being passed to new suppliers) may cost more than the rescue and some of the project issues were a case of Carillion accepting too much risk which benefited the public sector organisation they were working with in the form of reduced cost. The counter-argument is that any Carillion rescue package would likely have resulted in the work being completed but the company wound up as it was unable to sustain it's existing business.

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