Interserve agrees terms of rescue deal with banks

Interserve announced this morning that its had agreed principles of a debt for equity rescue deal with its lenders.

Debbie White, CEO of Interserve, said: “Agreeing the key commercial terms of the deleveraging plan with our lenders, bonding providers and Pension Trustee is a significant step forward in our plans to strengthen the balance sheet.”

But in a further twist today, a key shareholder has issued a call to oust eight main board directors, while remaining in support of the chief executive.

Coltrane Master Fund, which holds over 5% in the group, has called for the general meeting with the aim of removing key directors: Glyn Barker, Mark Whiteling, Russell King, Anne Fahy, Nick Salmon, Gareth Edwards, Dougie Sutherland and Nicholas Pollard.

The complex rescue deal will see banks take £480m of new Interserve shares to help slash group net debt from over £600m to £275m.

This will almost wipe out existing shareholders with the new shares accounting for 97.5% of the enlarged Interserve stock.

The RMD Kwikform business will remain within the wider Interserve group, but as part of the deal some £350m of existing debt will be shouldered by the profitable business.

Existing lenders will release an extra £75m of new liquidity through a new debt facility, while bonding providers will provide additional facilities  required by Interserve’s business plan.

The terms of the deal must still be backed by Interserve’s shareholders, who will be told it is critical to the survival of the group.

But Interserve said this morning that it was actively preparing alternative plans to ensure the proposed deal could be implemented even if shareholder’s reject the plan. 

White added: “The board believes that this agreement will secure a strong future for Interserve. 

“This proposal has been achieved following a long period of intensive negotiation and has the support of our financial stakeholders and Government. 

“Its successful implementation is critical to the Interserve group’s future and all of its stakeholders.

She said: “The deleveraging plan will, alongside our ‘Fit for Growth’ transformation programme, place us in a strong position to deliver our strategy, be competitive in the marketplace and provide a secure future for the Interserve Group’s employees, customers and suppliers.”

from Construction Enquirer http://www.constructionenquirer.com/2019/02/06/interserve-agrees-terms-of-rescue-deal-with-banks/

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