Fears grow for Interserve as second rescue plan is rejected

Support services and construction group Interserve has rejected a revised restructuring deal tabled by one of its key shareholders with its chairman claiming the proposal would jeopardise the future of the company and all its staff.

The outsourcing giant say any implementation of a new proposal would put a halt to its previously announced plan with the firm insisting there is not enough time to consider the details in full.

The revised deal has been put in place by US shareholder Coltrane Asset Management, who are believed to be in favour of a restructure that would see investors end up with 35% control of Interserve.

Interserve chairman Glyn Barker said the original plan set out is the only one that “provides a certain future for Interserve” and some value for shareholders while securing jobs, pensions, and continuity of services.

He added: “This is a critical time for Interserve. The proposed deleveraging plan, recommended by the board, is the result of a long period of intensive negotiation to align stakeholders behind a plan to strengthen the balance sheet and secure a strong future for the business."

Just last week, the outsourcing giant hailed “significant progress” in turning its financial situation around despite posting £111.3m in pre-tax losses for 2018.

For the year to 31 December 2018, the company net debt increased to £631.2m from £502.6m and its turnover fell by 10.7% to 2.9bn. Operating profits for 2018 were down 27% to £39.6m as turnover dropped to £195.5m from £229m.

Debts suffered by the British contractor are down to incremental cash costs from Energy from Waste contracts, delays in collecting receipts from certain Middle Eastern customers and exceptional costs sustained on a number of construction projects.

Efforts are now likely to be made by Interserve bosses over the next two weeks to hold talks with the firm’s major shareholders to secure the necessary 50% approval of the plan at the pivotal 15 March vote.