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Carillion in crunch talks with Government after lenders reject business rescue plan

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Calls were mounting for the Government to step in to prop up stricken outsourcer Carillion this evening amid fears the company is teetering on the edge of administration.

Shares in the outsourcer plunged 28.9pc to an all-time low of 14.2p on Friday, leaving its £1.5bn debts dwarfing its market value of just £61m.

Separate government departments are hashing out contingency plans in case Carillion collapses, in the latest sign ministers are losing confidence in whether the company can come to an agreement with banks, such as a debt for equity swap.

The Ministry of Justice, for example, is pulling together proposals to take back prison contracts from Carillion into public ownership.

A spokesman for 10 Downing Street said: “Of course the Government will make contingency plans for many different situations. We are monitoring the situation closely and are in regular contact with the management team there. The Government remains supportive of Carillion’s ongoing discussions with their stakeholders.”

Carillion is a key government contractor, working across departments on projects including the HS2 rail link. It employs around 20,000 people across the UK.

Senior Cabinet ministers, including Business Secretary Greg Clark, Transport Minister Jo Johnson and Justice Minister Rory Stewart, were updated on the situation earlier this week, while this evening rumours swirled that PricewaterhouseCoopers had been called in to advise Cabinet Office on contingency plans.

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