Trade credit insurers pull cover as Carillion “hangs by a thread”
Euler Hermes and other trade credit insurers have stopped writing new coverage for suppliers to embattled contractor Carillion, sending a signal the company is at risk of collapse, according to reports.
Tokio Marine HCC and MGA Nexus also said they would not insure deliveries to the firm, Insurance Insider reported. Trade credit insurance protects firms against the risk of a customer going insolvent.
Yesterday, Carillion dismissed reports lenders had rejected a critical restructuring plan.
Its shares sank after reports EY had been selected by Carillion's directors to be on standby for an administration, ending the week at just 14.2p.
The fresh dismay caused the Rail, Maritime and Transport (RMT) union's general secretary Mick Cash to repeat his call for assurances for workers today.
"The government should be giving clear-cut assurances to the workers who are watching the Carillion crisis play out on their TV screens this weekend. They are caught in the crossfire of a financial crisis that is not of their making and ministers should be giving them the guarantees that RMT and other unions have been demanding," he said.
"Thousands of jobs, and a whole raft of essential services and works, are hanging by a thread this weekend."