January 25, 2018 2:15 pm
Updated: January 25, 2018 7:02 pm

Carillion Canada, major road maintenance contractor, files for creditor protection

A Carillion crane at a construction site in London, Britain.

EPA/ANDY RAIN
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Carillion Canada has been granted protection from creditors by the Ontario Superior Court under the Companies’ Creditors Arrangement Act.

The Canadian branch of insolvent British construction giant and state contractor Carillion PLC said on its website on Thursday that its decision to seek CCAA protection was forced by the compulsory liquidation of its parent company earlier this month when it couldn’t arrange short-term financing.

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It said that event gave rise to “unexpected liquidity challenges” for the Canadian operations.

“It is expected to be business-as-usual for all Canadian Carillion applicants as they continue to operate under the protection of the initial order,” it said.

“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 says it employs more than 6,000 people in Canada. It did not immediately respond to a request for further information.

According to its website, its operations include facilities management and maintenance in sectors including oil and gas, health care and aviation, as well as handling road maintenance for 40,000 kilometres of highway in Alberta and Ontario.

It is also involved in private public construction partnerships, one of which is currently building a new mental health hospital in North Battleford, Sask.

Carillion Canada said it will use the court protection to stabilize operations and consider options to satisfy creditors and the court. The initial protection period is for a month but it can be extended.

READ MORE: Carillion Canada, major hospital and road contractor, says it’s soldiering on despite U.K. collapse

The company said the protection order covers Carillion Construction Inc., Carillion Canada Inc., Carillion Canada Holdings Inc. and Carillion Canada Finance Corp.

Canadian construction industry analyst Frederic Bastien said he’s not surprised Carillion has filed for protection given its parent’s financial woes.

He said he expects the company’s divergent businesses in Canada, which include equity positions in several hospitals including the Centre for Addiction and Mental Health in Toronto, will ultimately be split up and sold.

“I would expect that over time all of their assets are going to come up for sale,” he said.

READ MORE: Thousands of Canadian jobs at risk after U.K. construction company collapses

“I don’t expect that Carillion Canada will re-emerge as an operating company down the road.”

He said its support services business could attract a bid from Brookfield Asset Management.

Carillion says it earns about $1 billion a year in Canada and has been working here for about 60 years.

© 2018 The Canadian Press

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