Interserve agrees on rescue deal with banks

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Interserve has announced a rescue deal that will hand control over to its banks following talks with lenders and government ministers to prevent its collapse

Interserve’s rescue deal includes reducing its debts from over £600m to £275m by issuing new shares.

Under the rescue deal, Interserve will also keep its most profitable division, its RMD Kwikform construction business, loading £350m of debt onto its balance sheet.

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.

“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.

“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.”

Interserve has a market value of £17m, down from £500m in 2017, and a turnover of £3.2bn. About 70% of Interserve’s turnover comes from government contracts.

Interserve expects to launch the finalised Deleveraging Plan in the next few weeks; the Deleveraging Plan will be subject to approval by Interserve’s shareholders.

Whilst Interserve’s objective remains to implement a fully consensual transaction, Interserve is also actively preparing alternative plans to ensure the proposed transaction can be implemented in the event that shareholder approval is not forthcoming.

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