Interserve agrees £292m rescue funding with banks

Aaron Morby 6 years ago
Share

Interserve has finally sealed a refinancing deal with its banks to tide the business through its cash flow crisis.

Debbie White, Interserve’s chief executive, says the extra headroom is a major step in securing a firm financial platform
Debbie White, Interserve’s chief executive, says the extra headroom is a major step in securing a firm financial platform

The debt-stricken firm revealed late on Wednesday that it had agreed commercial terms in principle with its main banks for extra cash facilities of £197m and fresh bonding up to £95m.

The deal would extend cash borrowing facilities to £834m, but crucially does not pay down debt, expected to rise to £600m this half.

This raises the prospect of Interserve still needing a rights issue or debt for equity swap at a later stage to repair its balance sheet.

As part of the proposed new deal, Interserve’s banks have options to buy new shares, presently worth 88p, for 10p per share, which if exercised, would give them a 20% stake in the group.

These commercial terms still need to be rubber stamped by all Interserve’s lenders.

Debbie White, Interserve’s chief executive, said: “Today’s announcement is a significant milestone for Interserve and a major step in securing a firm financial platform to underpin the group’s future. 

“We are encouraged by the support from our lenders in respect of these new facilities, which will allow the new management team to execute our business plan, focused on delivering a great service for customers, driving growth and restoring value.”

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.  

Emergency borrowings of £45m agreed last December will be repaid out of the new facilities, once these are in place.

Pricing on both the new facilities, and the existing debt and bonding facilities have been renegotiated as part of the refinancing.

In 2018, Interserve’s total cost of borrowing will rise to £56m of which £34m will be cash interest. The increased cost of bonding instruments already issued will be £3.2m.

 

Latest news

Stonehenge tunnel hit by another legal delay

Court upholds latest appeal against £1.7bn scheme by campaigners
11 hours ago

Plans go in for huge Olympic Park construction hub

Bow Goods Yard could deliver 3.5m tonnes of materials a year to sites across London
16 hours ago

40% affordable homes target for Labour’s new towns

Labour pledges to select new town sites by end of first year
14 hours ago

Plan for £100m Liverpool Baltic station

Construction work could begin next year
19 hours ago

Surgo Construction went down owing £4.5m

Biggest creditor is Bellway Homes after dispute on housing job
18 hours ago

Vistry seals £157m West London housing deal

Around 575 homes to be built at Merrick Place scheme in Ealing
18 hours ago

Streamlined Watkin Jones returns to profit in first half

Multi-room specialist sees secured work pipeline hit £1.4bn
18 hours ago

Bellway hires ex-brickie as group construction chief

James Griffin to oversee move to the Future Homes Standard and timber frame.
19 hours ago

Persimmon under fire for delays to £10m relief road

West Suffolk Council serves Breach of Condition Notices after timetable slips again
19 hours ago

BAM wins £33m Kent secondary school job

Replacement Swanley academy to be built at live school site
19 hours ago

Aluminium cladding specialist collapses

Melton Mowbray-based firm worked for several main contractors
2 days ago

Brickwork contractor Lee Marley returns to profit

Affordable and rental homes demand lifts brickwork contractor
2 days ago

Housing contractor Durkan suffers second year of losses

More fire safety provisions tip firm into £3.9m loss
2 days ago

Farrans makes breakthrough on tricky tunnel job

Tunnel under Tees latest part of new £155m water pipeline job
2 days ago

Heidelberg buys aggregates and earthworks specialist B&A

Latest deal follows acquisition of Mick George
2 days ago

Flagship biodiversity net gain scheme flawed

NAO warns Government's flagship green development scheme at risk of failure
5 days ago

Plan in for £3bn Lincolnshire mega data centre

3.3m sq ft Humber Tech Park will be one of Europe's largest data centres
5 days ago

Green light for Digbeth 1,300 homes scheme

Warner’s Fields scheme to start with excavation and landscaping of the River Rea
5 days ago

£210m M3 Junction 9 upgrade gains consent

VolkerFitzpatrick to start work in early 2025 on Winnall roundabout, near Winchester
5 days ago

United Living wins 14-year L&Q homes repairs deal

Trafford housing upkeep deal worth £205m
5 days ago

£400m Lewisham resi-led scheme advances

Land deal paves way for Amro Partners' 1,000-home London scheme
5 days ago

McLaren gets go-ahead for Grade II listed Leeds student scheme

Springfield House to be revamped and two new wings added
5 days ago

Piling giant to fit people alarms on all rigs

Cementation Skanska upgrades site safety systems
5 days ago

Vistry to make £800m profit after subcontractor cost cuts

House builder bullish about shareholder returns after asking suppliers for discounts
6 days ago

Shareholders approve £2.5bn Barratt and Redrow merger

Final hurdle is for the competition regulator to approve the deal.
6 days ago

Green light for £80m Leith waterfront revamp

Build-to-rent homes and student accommodation scheme to be built
6 days ago

Tilbury Douglas clears Interserve legacy jobs to return to profit

Revenue tops £500m in first year as standalone contractor
7 days ago

Land deal paves way for Manchester civil service office hub

Government buys five acres at former Central Retail Park
6 days ago

Speller Metcalfe wins Wolverhampton library upgrade

Full works are due to start in the autumn
6 days ago

Skills shortage puts big infrastructure projects at risk

Government failing as an intelligent client and now over-reliant on consultancies
7 days ago

Contractor services