Sector - Commercial
Interserve announces losses and increases shareholder control
Troubled contractor Interserve has released data on its 2018 losses and increased shareholder control to stabilise its finances.
New plans released by Interserve will increase shareholder control and give them a vote on the proposals at a general meeting in March. Newly released data showed that the company had cut its losses by nearly half to £111 million despite debt increasing to £631.2 million.
Shares recently fell by 8.2% but the increase in profits and control may gain favour with shareholders, especially majority shareholder US Hedge fund Control Asset Management who have made demands for control in the past. The company’s lenders will provide an extra £110 million in liquidity until 2022 and have promised to wipe out £1 of debt for every £9 converted to equity.
The company’s Deleveraging Plan was agreed upon with several company partners. The board has recommended that shareholders vote in favour of the resolutions that will be proposed at the general meeting.
CEO of Interserve Debbie White said: “The agreement of Deleveraging Plan terms with our lenders, bonding providers and Pension Trustee represents a significant milestone for Interserve. Implementation of the Deleveraging Plan is in the best interest of all our stakeholders.”
“The plan provides new liquidity and creates a strong balance sheet, which, alongside our Fit-for-Growth programme, will provide us with a competitive financial structure to continue to improve the business and deliver on our long term strategy.”
The Deleveraging Plan is designed to cover short-term financial obligations. Major shareholders have made big demands in the face of Interserve’s problems, the vote next month will require a 50% majority for the proposals to go ahead.
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