Carillion Canada gets creditor protection after failure of U.K. parent

Carillion Canada, which employs more than 6,000 people, says it has been granted creditor protection following the collapse of its U.K. parent company earlier this month.

Company performs road clearing, along with hospital construction and maintenance

A crane bears the name of Carillion at a construction site in central London Jan. 15. The construction and services giant has gone into liquidation. Carillion Canada says it has obtained court-ordered creditor protection. (Yui Mok/Associated Press)

The Canadian divisions of U.K. construction firm Carillion PLC said Thursday they have been granted court-ordered creditor protection following the collapse of their parent company earlier this month.

Carillion Canada, which employs more than 6,000 people, said the move came after its parent started liquidation in the United Kingdom on January 15, which led to "unexpected liquidity challenges" for the Canadian operations.

The creditor protection filing was approved by the Ontario Superior Court of Justice. It covers Carillion Construction Inc., Carillion Canada Inc., Carillion Canada Holdings Inc., and Carillion Canada Finance Corp.

Carillion Canada said the creditor protection filing is not a bankruptcy or liquidation filing, and that it expects to continue operating under the court order.

The company's Canadian operations include public road maintenance, the construction and maintenance of hospitals, remote workforce camp operations, and power line construction and maintenance.

Carillion Canada said it does not "anticipate any disruption to the various services they provide and do not expect that this protective filing will impact the public in any way. Public safety remains our top priority, be it in the maintenance and cleaning of hospitals, the clearing of roads or any of our other activities."

The company said it will use the protection to stabilize operations, and shore up its short- and long-term liquidity situation, while also looking at its business options. The initial period of protection runs for one month but can be extended.

Raymond James construction industry analyst Frederic Bastien said he expects Carillion's Canadian operations to be split up and sold.

"I would expect that over time all of their assets are going to come up for sale," he said. "I don't expect that Carillion Canada will re-emerge as an operating company down the road."

Ernst & Young has been appointed as monitor in the creditor protection proceedings. 

with files from The Canadian Press