16 January 2018 0 Comments Posted By : Gordon Hoekstra

What effect does collapse of U.K.-based Carillion have on B.C.-based Rokstad Power?

In the immediate aftermath of the announced liquidation of global construction and services giant Carillion PLC, it is unclear what the effect will be on its Canadian operations, including local Rokstad Power.

Darcy Leach, Rokstad’s corporate and legal affairs director, said Monday the B.C.-based company is monitoring the situation closely but does not at this time know what will happen or when.

However, Leach said from the information they have been able to glean, they believe the liquidation events will be isolated to the U.K.

“As far as we are concerned, it’s business as usual,” Leach said in an interview. “We are positive we are in a good position — and we will continue going forward and servicing our many clients.”

U.K.-based Carillion has 43,000 employees worldwide, including 6,000 in Canada. About 500 people are employed in western Canada and the U.S. by Rokstad Power, a Coquitlam-based company that builds and maintains power lines.

Carillion bought a 60-per-cent stake of Rokstad Power at the end of 2014.

Carillion collapsed Monday after creditors and the U.K. government refused to bail out a firm struggling under the weight of more than £1.5 billion ($2.6 billion) of debt.

Carillion said it had no choice but to go into compulsory liquidation after weekend talks with creditors failed to get the short-term financing it needed to continue operating. The construction and services company is working on major public works projects, such as the HS2 rail line in northern England, while also maintaining prisons, cleaning hospitals and providing school lunches.

In Canada, the firm has military, road and hospital contracts.

“This is a very sad day for Carillion, for our colleagues, suppliers and customers that we have been proud to serve over many years,” Chairman Philip Green said.

Under laws in the U.K., liquidation involves the wind up of the company where assets are sold to pay debts.

On Carillion’s website, a statement says that an official receiver has been appointed to oversee the liquidation and that the receiver is seeking to maintain operational continuity.

Doug McKay, business agent for local 258 of the International Brotherhood of Electrical Workers, headquartered in Burnaby, which represents hundreds of Rokstad workers, also said there is some belief the Canadian arm could be left on its own.

Rokstad is also believed to be in talks to find another partner, said McKay.

Rokstad recently finished a major transmission project in Newfoundland and is working on another in Manitoba.

In B.C., Rokstad has worked on such projects as B.C. Hydro’s Interior to Lower Mainland project, a 95-kilometre power line to Imperial Metals’ Red Chris copper mine in northern B.C., and a 40-kilometre line into Pretium’s Brucejack underground gold mine in northern B.C.

Carillion has been struggling to reorganize for the past six months amid debts of about £900 million ($1.54 billion) and a pension deficit of £590 million. Carillion’s share price has plunged 70 per cent in the last six months.

Britain’s government refused to rescue Carillion, saying it could not be expected to bail out a private company.

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