Interserve sweetens rescue deal for investors as lenders agree to provide an extra £110m of liquidity until 2022
Interserve has sweetened the terms of its rescue deal to placate shareholders
Struggling support services provider Interserve has sweetened the terms of its rescue deal to placate shareholders.
But it didn’t soothe the anger of its biggest investor, which is threatening legal action.
Debt-ridden Interserve provoked outcry when it said its second bailout in a year would virtually wipe out investors, cutting their stake from 100 per cent to 2.5 per cent.
Interserve has now doubled that to 5 per cent, meaning its lenders will hold 95 per cent, and shareholders will be able to vote on the deal on March 15.
Its lenders have agreed to provide an extra £110million of liquidity until 2022 and will shave 10 per cent off what they are owed. Interserve said its debts were £631million at the end of 2018.
But Coltrane Asset Management, which owns a 28 per cent stake, was unimpressed – last week it proposed an alternative giving shareholders a 10 per cent stake.
A source accused lenders of ‘holding a gun to the company’s head’.
Coltrane is said to be planning litigation if the bid fails to go through and EY, the firm’s administrator, sells the company in a pre-pack administration.
Investors will be able to vote on a proposal by Coltrane to scrap the entire management team except for chief executive Debbie White on March 26.
Interserve said it more than halved its loss before tax to £111.3million in 2018, from a loss of £244.4million in 2017, despite its revenues falling by 11 per cent to £2.9billion.