Interserve awaits crunch vote
Shareholders of Interserve are set to vote this Friday on whether or not to back a rescue deal sanctioned by the company's board.
Interserve its proposing a debt-for-equity swap that will leave lenders with 95% of the business and existing shareholders with just 5%.
The deal requires at least 50% shareholder approval. If shareholders don't approve the deal then EY is reportedly poised to take over as administrator of the business. All of the company's trading entities, staff and contracts would transfer into a new, unlisted company owned by the lenders that would continue to trade normally as part of the pre-pack deal, it has been reported.
Interserve's largest shareholder, Coltrane Asset Management, remains opposed to the plan.
But chief executive Debbie White said in an interview with the Sunday Times that Interserve would "absolutely not" become the next Carillion and has "probably one of the strongest balance sheets in the support services sector and in UK construction. She said the rescue plan was a "pivotal point of bringing real stability to the business".
Meanwhile, it was claimed yesterday that a group of banks and investment funds are considering offering Interserve investors a 7.5% share of equity in the contractor, an increase on the 5% previously proposed, in a bid to sweeten the deal ahead of the vote.
In response, a statement from Interserve said: "The Interserve board notes today's Sky News article and confirms that it has been in discussions with Coltrane and its lenders which have sought to establish the basis on which Coltrane would support the company's restructuring proposal.
"Although the board is seeking to improve the position of all shareholders, there is no certainty that it will be able to do so in the very limited time available.
"The only proposal which is currently capable of being implemented is the recommended deleveraging plan through which, inter alia, shareholders will retain 5% of the equity of the restructured Interserve with the ability to acquire further equity through the open offer."