Insolvency specialist UHY Hacker Young has said that companies owed money by Carillion may receive less that 1p for every pound they are due.
“Any company affected by Carillion’s collapse should conduct a heath check to make sure they are still a viable going concern,” said UHY partner and licenced insolvency practitioner Peter Kubik.
“There will be a huge knock-on effect amongst smaller firms, especially as many creditors can expect to receive less than 1p for every £1 they are owed by Carillion.”
“A prescribed £600,000 will be spread extremely thinly amongst trade creditors who are owed more than £100M in total.”
“The secured creditors, which are mostly banks, are owed roughly £900M and will get first bite of the company’s remaining assets as it gets liquidated.”
“Those construction companies and sub-contractors that derived the lion’s share of their income from Carillion are facing some tough months ahead. Many of these firms may not have trade insurance either as this would have been difficult for them to obtain amid a flurry of recent profit warnings from Carillion.”
“We are already in conversation with several creditors who are owed in excess of £1M each and suggest anyone in a similar position seeks professional advice.”
Van Elle has already revealed that it is owed £1.6M by Carillion but the collapse of the outsourcing and construction firm is expected to affect many more ground engineering related businesses.