[Football] Carillion on the brink ?

[TSB]

So shareholders got paid but not the small businesses that they owed money to.

In minimal dividends, perhaps, but I know shareholders who invested at over £2 a share and have had it confirmed today that their investment have been completely wiped out so it's worth pointing out that many Private Investors are also casualties of this.

 

[CHAPPERS]

In minimal dividends, perhaps, but I know shareholders who invested at over £2 a share and have had it confirmed today that their investment have been completely wiped out so it's worth pointing out that many Private Investors are also casualties of this.

Yep, just read up on that. Cheers.

 

[Hiney]

Something that has always intrigued me is how the banks let it happen not just the once but loads of times. If we get near to an overdraft scenario they are breathing fire and brimstone down the phones at us.
Unfortunately the Government are in a no win situation, do they bail them out or let them go under and put 20,000 out of work. No tax co.ing ing but dole money going out.

Sent from my SM-G925F using Tapatalk

Owe £100 and it's your problem
Owe £100 million and it's the Banks problem

 

[JetsetJimbo]

Seems the government is going to make it the taxpayers' problem rather than let their friends in the banking sector take the hit.

 

[beorhthelm]

Seems the government is going to make it the taxpayers' problem rather than let their friends in the banking sector take the hit.

in liquidation everyone is taking a hit. shareholders are gone, banks and bond holders will get a fraction of what was owed.

 

[Dr. No]

Seems the government is going to make it the taxpayers' problem rather than let their friends in the banking sector take the hit.

No.

 

[Dave the OAP]

Utter garbage.

There are loads of investible companies who don’t pay dividends. Basic cash flow analysis will tell you whether a company should be paying a dividend or not.

If the company were concerned about their liquidity, there is no way they should have been paying a dividend. When commodities dropped a couple of years ago all the miners suspended payouts to shareholders as a means of preserving cash. A company with liquidity issues should be managing working capital and debt service ability before even thinking about doling out shareholder cash.

Shareholders come dead last in repayment scenarios and the same should be for dividends. Indeed using a dividend to prop up your share price is a recipe for disaster.


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thanks

 

[BigGully]

Yep, just read up on that. Cheers.

Make your mind up, do you hate 'greedy' shareholders or not, well you did a little while ago until you 'read up on it' and found they are likely to be big losers too, so that's ok then, then came your anger that the Tories had (in your mind) took the glory away from the EU in a re-badged EU directive on credit card charges, only to be told that perhaps it isnt the best bit of legislation anyhow so you have quickly handed it back to the Tories to continue your ranting, worthless views.

 

[The Andy Naylor Fan Club]

How could Carillion be allowed to run up a £500 million + pension deficit? Are companies allowed to dip into pension pots and who picks up the shortfall, the government or the people who are owed the pension?

 

[beorhthelm]

How could Carillion be allowed to run up a £500 million + pension deficit? Are companies allowed to dip into pension pots and who picks up the shortfall, the government or the people who are owed the pension?

no, they cant dip in, though they could do pension holidays not paying in the full amount of pension contributions (may have been stopped from this). deficits are really accountancy matters complicated due to regulations around how the pension is calculated. most are "in deficit" simply because the current interest rate is low, while it may likely have plenty of cash and investments. the problem for large companies is that they are obliged to make up the shortful if there is an actual need for cash, so it shows as a liability for the business.

 

[The Andy Naylor Fan Club]

no, they cant dip in, though they could do pension holidays not paying in the full amount of pension contributions (may have been stopped from this). deficits are really accountancy matters complicated due to regulations around how the pension is calculated. most are "in deficit" simply because the current interest rate is low, while it may likely have plenty of cash and investments. the problem for large companies is that they are obliged to make up the shortful if there is an actual need for cash, so it shows as a liability for the business.

Thank you. That's helped me understand the pension issue.

 

[Gritt23]

Seems the government is going to make it the taxpayers' problem rather than let their friends in the banking sector take the hit.

How do the banks "take the hit" that is currently resting with Givernment and therefore taxpayers?

Banks have lent Carillion money, and I would suggest they will struggle to get fully repaid on that now, so my guess is they will "take a hit." Whereas the "hit" taken by the Government is going to be on the costs of the 20,000 workers losing their jobs, and being entitled to have unpaid earnings, and effectively an unpaid redundancy picked up via individual claims to the Insolvency Services. Plus all the Public Sector building contracts which they will have to get someone else to step in and price - a price that will inevitably be higher now, but the Government cannot leave these projects half built.

Quite how those "hits" to the Government purse could be picked up by the banks is beyond me. Do explain.

 

[Gritt23]

Owe £100 and it's your problem
Owe £100 million and it's the Banks problem

And if the Bank believe they have security sufficient to recover the bulk of that £100m, then it's your problem again.

 

[CHAPPERS]

Make your mind up, do you hate 'greedy' shareholders or not, well you did a little while ago until you 'read up on it' and found they are likely to be big losers too, so that's ok then, then came your anger that the Tories had (in your mind) took the glory away from the EU in a re-badged EU directive on credit card charges, only to be told that perhaps it isnt the best bit of legislation anyhow so you have quickly handed it back to the Tories to continue your ranting, worthless views.

I wasn't agreeing with anything, I was thanking for his post.

 

[Gritt23]

How did a company with so many government contracts get away with this 120 days bullshit?

I understand that some very serious money is owed to Carillion from the state of Oman going back up to 5 years!! Just for some perspective for you.

Carillion were very bad payers, notoriously bad for many years. Standard terms of 60 or 90 days, with payments often taking up to 120 days. The last few years though they have been offering a form of reverse factoring, whereby they agree your certificate in good time, and while it technically falls due after 120 days, their facility with the bank allows you to drawdown the value of that invoice on around day 20. depending on the deal you did with them, the break-even point on interest would be around day 35, so a draw on that invoice before day 35 and you'd pay a bit of interest, but draw after day 35 and you'd earn a bit of interest. However, technically teh due date on that invoice remained 120 days even though you didn't have to wait anything like that long to see the cash.

What I don't know is how widespread that arrangement was. I've worked for Carillion as a fairly small sub-contractor, as well as now, a pretty sizable one. In both cases I've been on that facility, but I can't speak for others who may have been outside of that and still trading on 120 days with them. It would be a pretty small percentage of their creditors though, IMHO.

 

[Dave the OAP]

I understand that some very serious money is owed to Carillion from the state of Oman going back up to 5 years!! Just for some perspective for you.

Carillion were very bad payers, notoriously bad for many years. Standard terms of 60 or 90 days, with payments often taking up to 120 days. The last few years though they have been offering a form of reverse factoring, whereby they agree your certificate in good time, and while it technically falls due after 120 days, their facility with the bank allows you to drawdown the value of that invoice on around day 20. depending on the deal you did with them, the break-even point on interest would be around day 35, so a draw on that invoice before day 35 and you'd pay a bit of interest, but draw after day 35 and you'd earn a bit of interest. However, technically teh due date on that invoice remained 120 days even though you didn't have to wait anything like that long to see the cash.

What I don't know is how widespread that arrangement was. I've worked for Carillion as a fairly small sub-contractor, as well as now, a pretty sizable one. In both cases I've been on that facility, but I can't speak for others who may have been outside of that and still trading on 120 days with them. It would be a pretty small percentage of their creditors though, IMHO.

You obviously know more about this than most.

Do I take it the way PFI works is that the government say
" We want a hospital but we are not going to pay any money for it until it is built and signed off"
The contractor says " Ok then, we will build your hospital for £500 million , we will finance completely finance it and when it is built, we will send you a bill for £500 million and a add on for say £100 million to cover profit etc.."
" oh and we will maintain and run the infrastructure for a sum on £10 million a year for a thousand years or to the point where anyone will take the work on ( like Railtrack)"

Is that how PFI works?

 

[BigGully]

I wasn't agreeing with anything, I was thanking for his post.

I know that, but its your first instinct that is clear, business, banks, shareholders, Brexit, and predominately the Tories is something you particularly hate, we all dislike them at some point to different degrees and I have a current political position but it doesn't consume me, you seem to fire from the hip and pick up facts a bit later and if they don't fit you move on to something else to blame on your preferred targets.

 

[CHAPPERS]

I know that, but its your first instinct that is clear, business, banks, shareholders, Brexit, and predominately the Tories is something you particularly hate, we all dislike them at some point to different degrees and I have a current political position but it doesn't consume me, you seem to fire from the hip and pick up facts a bit later and if they don't fit you move on to something else to blame on your preferred targets.

Fairdy dos, maybe a bit of truth in that

Not sure I agree with your assessment on the credit card bit though.

 

[Dave the OAP]

So is this. Wimpey, McAlpines, Molem?

Jeez. So the only big one left that is a British company is Balfour Beatty.?

Interesting that they were owned millions by the Qataris for the world cup stadiums ...those of us with experience with working in the Middle East know getting money out of them is hells only job!

 

[aolstudios]

http://newsthump.com/2018/01/15/uk-...er-government-mistakenly-bails-out-marillion/