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 chief executive White.

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.

In a complex deal to slash debts by over half to £275m, key lenders, including RBS, HSBC and BNP Paribas, have agreed to release £75m to fund working cash and taking £480m new equity in the group

This will almost wipe out existing shareholders with the new shares accounting for 97.5% of the enlarged Interserve stock. Existing shareholders will then have the option to claw that £480m back through an open offer, likely to be discounted.

Bonding providers have also agreed to provide the additional facilities required by Interserve’s business plan.

The profitable RMD Kwikform business will remain within the Interserve group despite earlier reports that it may be sold off. As part of the deal, £350m of existing debt will be shouldered by RMD.

This will be non-recourse debt effectively ring-fencing the support services business within the Interserve Group.

The terms of the deal still needs to 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.”