Coltrane Asset Management, Interserve’s largest shareholder, has outlined a new plan to restructure the business in a bid to overturn a rescue plan supported by its lenders and directors
Interserve hopes to gain the support of at least 50% of shareholders to raise £435.2m through the provisional placement of new shares with the company’s lenders, arguing it would be “in the best interest of all our stakeholders”.
The deal will leave shareholders with 5% of the equity in the business, rather than the 2.5% originally reported ahead of the publication of details of the plan.
Coltrane Asset Management – along with hedge fund Farringdon owns 34% of the business – had previously made it clear that it was opposed to that plan. Now it has proposed a new plan.
Coltrane Asset Management wants to see the issue of at least £110m of new shares in the company, to be offered to shareholders prorate and underwritten by Coltrane. The new issue and the conversion of £435m of debt in the company into equity would leave existing creditors owning 55% of the business, and shareholders with 37.5%.
In a statement, Coltrane commented: “Given that a better proposal for a greater number of stakeholders is now on the table the directors, in their capacity as fiduciaries to the company, should halt cooperation with lenders on implementation of their plan.
“If the company is not able to make such a decision then this raises serious questions about the board’s decisions leading to this point, and about the position of the lenders, including major UK banks.
“Throughout this process, the board has prioritised discussions with lenders rather than shareholders, limiting the company’s options and reducing the scope for a solution that addresses the interests of all stakeholders.”
Responding to Coltrane’s proposal, Interserve said: “The board has this afternoon received an updated proposal from Coltrane Asset Management, which it is considering.
“A further announcement will be made in due course. In the meantime, the board remains committed to achieving a consensual deleveraging plan.”