Interserve’s shareholders have voted to approve increased borrowing limits of £834m ahead of the release of annual results on Monday.
The firm is expected to make significant fresh write-downs in its 2017 annual results after a group-wide contract review.
It is anticipated that net debt at year-end 2017 would be £513m. The extended funding deal agreed with bank last month crucially does not pay down debt, expected to rise to £600m this half.
Extended borrowing limits needed to be ratified by shareholders after extra cash facilities of £197m and fresh bonding up to £95m was agreed with banks.
As part of its extra financing , Interserve’s banks have options to buy new shares, presently worth 104p, for 10p per share, which if exercised, would give them a 20% stake in the group.
Interserve’s banks have also agreed to extend a looming covenant test to the end of April to allow documentation to be finalised for the refinancing.
The new facilities will mature in September 2021.
from Construction Enquirer http://www.constructionenquirer.com/2018/04/27/interserve-shareholders-back-new-borrowing-cap/
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