Carillion, a UK construction giant which is involved in a host of major government projects such as HS2 and Network Rail maintenance, is to go into liquidation, threatening thousands of jobs.

It comes after a weekend of talks between the company, its lenders and the government failed to reach a deal to save the UK’s second biggest construction firm.

In a statement to the London Stock Exchange, Carillion said: “Despite considerable efforts those discussions have not been successful, and the board of Carillion has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect.”

Philip Green, Carillion Chairman, said: “This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to server over many years. Over recent months huge efforts have been made to restructure Carillion to deliver its sustainable future. In recent days, however we have been unable to secure the funding to support our business plan and it is therefore with the deepest regret that we have arrived at this decision.”

The Financial Times suggests that ‘more than 43,000 employees as well as hundreds of subcontractors and smaller businesses’ are likely to lose their jobs. It has been reported by several news agencies, including The Guardian, that the government will provide the necessary funding to maintain the public services carried out Carillion staff. 

According to BBC Business Editor, Simon Jack, other companies are likely to take on some of the contracts, whilst others could be renationalised. Those that have money in Carillion pension funds will now be managed by the Pension Protection Fund (PPF).