epa06440399 A Carillion employee exits a site office in London, Britain, 15 January 2018. Thousands of jobs in the UK and abroad maybe lost following the news that Construction company Carillion is to go into liquidation. Talks between lenders and the UK government has failed to reach a deal.  EPA/ANDY RAIN
Thousands of jobs in the UK and abroad maybe lost following the news that construction company Carillion is to go into liquidation. Andy Rain / EPA

‘Business as usual’ in UAE despite liquidation of UK construction firm Carillion



The collapse of Carillion, the UK's second-largest construction company, is unlikely to significantly impact its interests and the projects in the UAE, according to people familiar with the matter, even as the firm's collapse threatens to significantly impact the UK's economy.

The construction firm, which employs 43,000 people globally, including 20,000 in the UK, went into liquidation on Monday after banks refused to provide any further financial support. The company has been struggling under the weight of heavy bank debt, pension obligations and delays in collecting payment from clients.

Carillion's UAE-based projects, which include major building works for Expo 2020 Dubai, are delivered via the Dubai-incorporated vehicle Al-Futtaim Carillion (AFC), a 51:49 joint venture between Emirati conglomerate Al-Futtaim Holding and Carillion.

“The local joint venture, which is 50 years old, has nothing to do with the UK entity – it is an independent operation in which Carillion is the minority stakeholder,” said a person with knowledge of the situation, who asked not to be named.

“There will be no direct impact on AFC’s projects. It’s the same as when a minority shareholder of any business gets into trouble. Life goes on.”

AFC, which was established in Dubai in the 1970s, was appointed last March to build the three themed districts for the Expo 2020 Dubai mega-event.

"We are in close contact with the company, and are constantly monitoring the current issue," an Expo official told The National.

“We do not anticipate any impact on project delivery and are on track to deliver a spectacular Expo on time and in budget.”

Construction of the theme districts at the Expo site in Dubai South is “well advanced” and work is continuing as planned, the official added.

Spokespeople for AFC and Al-Futtaim Holding were both unable to comment ahead of publication.

As well as Expo 2020 Dubai, AFC’s current contracts include the latest phase of Dubai World Trade Centre’s One Central development – its third one for the project. It has also worked on projects at Abu Dhabi’s Yas Island and Al Raha Beach developments, Dubai Festival City, and The Lofts by Dubai-based developer Emaar Properties.

Carillion was spun out of Tarmac in 1999 before acquiring UK house builders George Wimpey, Mowlem and Alfred McAlpine. The company has suffered from rising debt following cost overruns on key government construction projects and a downturn in new business.

In total, Carillion owes around £900 million (Dh4.5 billion) to banks including RBS, Santander UK, Lloyds, HSBC and Barclays, and has a pension deficit of £580m, bringing its liabilities to around £1.5bn.

Its shares, which have lost more than 90 percent of their value since a profit warning last July, were suspended from trading on Monday.

“In recent days 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,” Carillion’s chairman Philip Green said.

The appointment of PwC as administrators for the company's compulsory liquidation stunned analysts, who had expected the firm to be put into administration for restructuring.

The collapse of the company, which provides facilities management for courts, schools and hospitals as well as management services for military bases, threatens to send shockwaves across the UK economy.

British officials were working on Monday to ensure public services continued to function at schools, nuclear plants and along the national transport network, where Carillion manages high profile electrification contracts for operator Network Rail.

David Lidington, the de-facto deputy prime minister and head of the cabinet office, said the receivers would be paid by the government and direct all government contractual payments to Carillion staff.

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Read more:

Carillion reportedly on the verge of collapse

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“Ever since the profits warnings were announced in the course of last year, the various government departments that had business with Carillion have been drawing up contingency plans about how they might respond,” Mr Lidington said.

Jon Trickett, a spokesman for the opposition Labour Party, called for the nationalisation of government contracts with private firms.

PwC confirmed on Monday that shareholders would be wiped out, while the company's numerous subcontractors face substantial losses. Fellow construction firm Balfour Beatty, which is in a joint venture with Carillion in three roadworks projects, said it expects outflows of £35-45m as a result of the collapse.

Staff and former staff enrolled in Carillion pension schemes face significant haircuts, with early estimates suggesting up to 15 per cent for some schemes.

Carillion’s operations in the Middle East have shrunk substantially over the past year as the company grappled with financial difficulties; the firm announced its exit from Saudi Arabia, Qatar and Egypt In July. It also sold its 50 per cent stake in Carillion Alawi, a joint venture with Oman’s Zawawi family.

Following Monday’s news, a buyout of Carillion’s minority stake in AFC by Al-Futtaim Holding is one option on the table as AFC looks to minimise disruption to its operations and maintain its reputation.

“It is obvious that such talks could be taking place,” said a person familiar with the matter. “Logically speaking this would be a natural solution.”

However, any stake sale – whether to Al-Futtaim Holding as an outright acquisition, or to a different contractor – would have to be approved by the liquidators, said Daniel Xu, Dubai-based counsel at law firm King & Wood Mallesons.

“AFC has a strong track record here in the UAE and the impact of the UK liquidation will not be immediately felt, while residual uncertainties will be slowly sorted out,” he said.

Tell-tale signs of burnout

- loss of confidence and appetite

- irritability and emotional outbursts

- sadness

- persistent physical ailments such as headaches, frequent infections and fatigue

- substance abuse, such as smoking or drinking more

- impaired judgement

- excessive and continuous worrying

- irregular sleep patterns

 

Tips to help overcome burnout

Acknowledge how you are feeling by listening to your warning signs. Set boundaries and learn to say ‘no’

Do activities that you want to do as well as things you have to do

Undertake at least 30 minutes of exercise per day. It releases an abundance of feel-good hormones

Find your form of relaxation and make time for it each day e.g. soothing music, reading or mindful meditation

Sleep and wake at the same time every day, even if your sleep pattern was disrupted. Without enough sleep condition such as stress, anxiety and depression can thrive.

Our legal advisor

Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.

Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation. 

Education: Sagesse University, Beirut, Lebanon, in 2005.

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Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
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Recipe

Garlicky shrimp in olive oil
Gambas Al Ajillo

Preparation time: 5 to 10 minutes

Cooking time: 5 minutes

Serves 4

Ingredients

180ml extra virgin olive oil; 4 to 5 large cloves of garlic, minced or pureed (or 3 to 4 garlic scapes, roughly chopped); 1 or 2 small hot red chillies, dried (or ¼ teaspoon dried red chilli flakes); 400g raw prawns, deveined, heads removed and tails left intact; a generous splash of sweet chilli vinegar; sea salt flakes for seasoning; a small handful of fresh flat-leaf parsley, roughly chopped

Method

Heat the oil in a terracotta dish or frying pan. Once the oil is sizzling hot, add the garlic and chilli, stirring continuously for about 10 seconds until golden and aromatic.

Add a splash of sweet chilli vinegar and as it vigorously simmers, releasing perfumed aromas, add the prawns and cook, stirring a few times.

Once the prawns turn pink, after 1 or 2 minutes of cooking, remove from the heat and season with sea salt flakes.

Once the prawns are cool enough to eat, scatter with parsley and serve with small forks or toothpicks as the perfect sharing starter. Finish off with crusty bread to soak up all that flavour-infused olive oil.

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WBO Light Welterweight champion - 2004-06
WBA Welterweight champion – 2006-08
WBO Welterweight champion – Feb 2009-Nov 2009
WBA Light Middleweight champion – 2010-12
WBC Middleweight champion – 2014-15
WBO Light Middleweight champion – Aug 2017-Dec 2017

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The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

If you go

The flights Etihad (www.etihad.com) and Spice Jet (www.spicejet.com) fly direct from Abu Dhabi and Dubai to Pune respectively from Dh1,000 return including taxes. Pune airport is 90 minutes away by road. 

The hotels A stay at Atmantan Wellness Resort (www.atmantan.com) costs from Rs24,000 (Dh1,235) per night, including taxes, consultations, meals and a treatment package.
 

Engine: 4-litre twin-turbo V8
Transmission: 8-speed auto
Power: 470hp, 338kW
Torque: 620Nm
Price: From Dh491,500 (estimate)
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How to join and use Abu Dhabi’s public libraries

• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.

• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.

• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.

• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.

• For more information visit the library network's website.


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