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CARILLION PLC.
The record was public.
The warnings were in it.

Carillion was the United Kingdom's second-largest construction company, listed on the London Stock Exchange, with some 43,000 employees in 2016. It went into compulsory liquidation on 15 January 2018 with liabilities of almost £7 billion. This is a reading of the public record, not a retelling of the headlines.

Company number
03782379
Status
Liquidation
Incorporated
1999
Liabilities at liquidation
almost £7bn
THE PUBLIC TIMELINE
2015
Concerns about Carillion's debt situation are raised publicly. The company continues paying dividends and acquiring. The accounts show growing liabilities, visible to anyone reading the filings.
JUN 2016
Over 20% of Carillion shares are on loan to hedge funds; the share price falls 19% over the period. The market is pricing doubt into the stock while the filings still carry a going-concern statement.
10 JUL 2017
A trading update discloses an £845m impairment charge in construction services, mainly three loss-making UK PFI projects and Middle East costs. The chief executive resigns the same day. This is the moment the accounts' story becomes unambiguous.
SEP 2017
A second profit warning. The company reports it will breach banking covenants the following month, with full-year debts set to reach up to £925m. A recapitalisation plan is announced for early 2018.
15 JAN 2018
The recapitalisation fails to materialise. Carillion enters compulsory liquidation with liabilities of almost £7 billion, the most drastic procedure in UK insolvency law. Over 3,000 direct redundancies follow, plus losses among suppliers.

What was visible, and when

Read the record in order and the collapse was not sudden. The debt concerns were public from 2015. The filings in the years before the end showed a company carrying large liabilities against thin margins in its core contracts, and continuing to pay dividends while it did so. The July 2017 impairment turned a suspicion into a number. By the September warning, the company itself had told the market it would breach its banking covenants.

At no point did a supplier need inside information to tighten terms. The filings, the profit warnings and the covenant disclosure were all public. What was missing was not data but attention to it: the habit of checking the record of a counterparty that looked too big to fail.

The pattern, generalised

Carillion is the largest case of a pattern that repeats at every scale: rising debt visible in the accounts, impairments arriving late, dividends maintained past the point the balance sheet supports them, and finally a covenant breach that converts slow decline into sudden failure. The same signals appear in the filings of much smaller companies, and the same reading applies. The signs of insolvency guide is that reading, in order.

What it means for a credit decision

Size is not a cushion. A large counterparty with public debt problems is a large exposure, and the public record is the place where the problems show first. Checking filings, watching for impairments and covenant language, and treating a second profit warning as the event it is: none of it requires access, only the decision to look.

Sources
Facts on this page are drawn from the public record and published reporting on Carillion's collapse, including the company's own trading updates of July and September 2017 and the parliamentary inquiry of 2018. Figures: £845m impairment, debts up to £925m, liabilities of almost £7bn at liquidation.

The same record-reading, applied to any counterparty of any size. Search any England & Wales company free.