Interserve shares collapse as rescue talks continue

Aaron Morby 7 years ago
Share

Interserve this morning said it is making headway in talks with banks about a rescue deal to reduce its £650m mountain of debt.

Debbie White says Cabinet Office has expressed support for recovery plan
Debbie White says Cabinet Office has expressed support for recovery plan

But the plan to stitch together a debt for equity swap saw Interserve shares tank 65% on the news to just 8.5p, valuing the firm at under £13m.

Shares slumped because the proposed plan would see major banks write off loans for shares and would virtually wipe out existing shareholders and leave existing banks and debt holders taking a heavy hit.

In a statement issued on Sunday, Interserve said it was engaged in constructive discussions regarding the agreement.

Debt reduction plan

The contractor, which employs 75,000 worldwide, hopes a deal would cut its debt to 1.5 times core earnings.

The board also aims to renegotiate current financing deals, including extending repayment dates.

The form of the deleveraging plan remains to be finalised, although it is likely to involve converting much of Interserve’s external borrowings into new equity, part of which could be sold to existing shareholders and potentially other investors.

Debbie White, CEO of Interserve, said: “We are making good progress on our deleveraging plan which we expect to announce early in 2019.

“Our lenders are supportive of the deleveraging plan, which will underpin the long-term future of Interserve.

“Our refinancing in April of this year contemplated the development of a deleveraging plan in consultation with our stakeholders and the liquidity injected at that point also gave us the funding to execute our business plan.

“Our discussions with our lenders are a positive step in the process that was agreed as part of the April refinancing. The Cabinet Office has also expressed full support for the work we are doing to implement our long-term recovery plan.

“The fundamentals of our business remain strong. The deleveraging plan will give Interserve a strong long-term capital structure and provide a solid foundation on which to build the future success of the group.”

 

Latest news

Elements Europe went down owing supply chain £8.7m

Korean owner kept offsite specialist afloat with £71.8m of loans in bid to stem losses
8 hours ago

Altius and Erith win landmark London tower rebuild

Westminster council advances Huguenot House redevelopment
11 hours ago

Corbyn suppliers left £4.4m out-of-pocket

£33m-turnover civils contractor only employed eight staff
1 day ago

McAlpine to restore England’s largest Victorian water tower

Colchester’s iconic ‘Jumbo’ to be reborn as visitor destination
11 hours ago

Andrew Scott lands £20m Grand Pavilion revamp in Porthcawl

Restoration of landmark Art Deco building gets underway with 2027 finish target
10 hours ago

Keepmoat profit drops 35% as completions slide

Land pipeline expands to 24,400 plots as firm eyes rebound
10 hours ago

Bid race begins for £425m water transfer scheme

Contractors invited to help shape Affinity Water project
10 hours ago

Legacy building defects return to haunt Barratt Redrow

House builder sets aside £248m for Redrow fire and concrete frame fixes
1 day ago

Skanska agrees £153m price to revamp A47 Thickthorn junction

New link roads and underpasses to ease traffic near Norwich
1 day ago

First tower plans go in for £1bn Liverpool Pier Head site

First design will "set tone" of scheme which could contain 60-storey tower
1 day ago

Barhale creates new low-carbon chief board role

Haddon takes board seat while Solomon becomes eastern regional director
1 day ago

Met Police preps £300m framework for estate upgrade

Early market talks start ahead of October bid contest
1 day ago

Raft of SME firms win £94m framework places

More than 50 demolition and asbestos specialists chosen: Full list
1 day ago

GRAHAM gets go-ahead for £110m Boddingtons Brewery revamp

Work to start this summer after Gateway 2 approval secured
2 days ago

Thames Water finance chief joins BAM UK & Ireland

Abigail Farrell-Black joins contractor as new finance head after senior roles at Thames and Southern Water
2 days ago

FM Conway profit jumps to £33m under Vinci

Turnover hits £608m and cash surges £68m just two months into new ownership
2 days ago

McAlpine breaks ground at £1.25bn Port Talbot green steel job

Port Talbot switch to scrap-powered production by 2027
2 days ago

Cappagh lands £136m Portsmouth Water deals

Utility specialist wins AMP8 contracts for infrastructure and smart meters
2 days ago

Rethink over “anti-dumping” tariffs on Chinese diggers

Fair trade body reconsiders ruling after lobbying by manufacturers
2 days ago

Sparks agree near 4% wage increase from 2026

Top hourly rate in London to rise to £26.70 under JIB deal
2 days ago

Morgan Sindall to build new Cambridgeshire school

Latest win for contractor at Alconbury Weald development
2 days ago

BSR backlog swells as new build approvals run to 36 weeks

First official Government figures expose full extent of Gateway project logjam
5 days ago

Repair slowdown drags down construction output

New work activity rises in May despite overall 0.6% output fall
5 days ago

Equans suffers £29m loss as new build exit drags on

Refocused retrofit contractor still dogged by legacy losses despite profitable core work
5 days ago

Scaffolding trade body NASC facing discrimination claim

Former training manager to take trade body to Employment Tribunal
5 days ago

ACS lands lead role on Stafford transformers lab

Contractor to start main £20m expansion in live site environment
5 days ago

GRAHAM sees profits rise despite dip in turnover

Record order book as contractor confident about future prospects
5 days ago

Nixon Hire sells 200-strong welfare van fleet to Sunbelt

Sunbelt more than doubles mobile site welfare capability
6 days ago

Henry family and directors face claims topping £31m

Administrators chasing dividend payout, unpaid loans and family benefits
6 days ago

Vistry eyes second-half affordable homes work surge

Government rent reforms and funding pledges power-up work pipeline
6 days ago