Interserve faces administration as rescue talks fail
15 Mar 2019
Outsourcing giant Interserve is expected to go into administration after the company’s shareholders voted against a rescue plan
15 Mar 2019
Shareholders voted 59.38% against the plan, which would have seen their stake reduced to just 5%, with lenders being handed the largest share of the business.
Last month it outlined a plan to reduce its net debt to £275m by issuing £480m of new Interserve equity. However, this new equity will be placed with the company’s existing lenders, who will then hold 97.5%, with ordinary shareholders left with just 2.5% of the equity in the company.
EY have been lined up as administrators. It has been reported that EY is likely to carry out a pre-pack administration to avoid a Carillion-style collapse.
Interserve employs 75,000 people worldwide, including 45,000 in the UK, and has been in financial difficulty for some time, in part as a result of pressure on margin in the outsourcing business and expansion into sectors such as waste energy. It is responsible for a number of key government outpouring arrangements, including cleaning the London Underground.
Report by Amy Austin