UK contractor Carillion enters compulsory liquidation

15 January 2018
Move throws doubt on the future of its Middle East contracting entities

UK contractor Carillion has entered compulsory liquidation with immediate effect, throwing doubt on the future of its Middle East construction business.

Carillion issued a statement on the London Stock Exchange on 15 January after talks with key stakeholders over the weekend failed to keep the company afloat.

Carillion is a shareholder in two major joint venture contracting companies in the region, and its liquidation in the UK will have an impact on its operations in the Middle East.

The liquidation could result in the local partners taking full control of the companies.

Carillion's largest business in the Middle East is Carillion’s UAE joint venture contracting company Al-Futtaim Carillion. The company is working on a several major projects in Dubai, including the AED2.2bn ($599m) contract for the Thematic Districts at Expo 2020 site. Its other projects include work at Dubai World Trade Centre, the Bee’ah headquarters building in Sharjah, and the Hard Rock Hotel in Abu Dhabi. Several of its contracts in the UAE have been secured with funding form UK Export Finance.

Al-Futtaim Carillion said that it will not be releasing any statement on the liquidation of Carillion.

Carillion also has a contracting business in Oman known as Carillion Alawi. Carillion sold 50 per cent of its business interest in the company to its joint venture partner in July last year.

Since then it has secured new work in Oman. In November it signed a letter of award with the Ministry of Health as the preferred bidder for the estimated RO122m ($317m) contract to design and build the New Sultan Qaboos Hospital in Salalah. It was also due to sign letter of award for a RO61m hospital in Khasab. Both contracts are supported by UK Export Finance.

Carillion said in July last year that it would exit its businesses in Qatar, Saudi Arabia and Egypt. At the time Carillion said it expected to provision a total of £845m, largely for four problem projects. It did not reveal which projects they were for commercial reasons, but did confirm that three were in the UK and one is in the Middle East.

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