Interserve Proposed disposal of PFI assets and notice of general meeting

Interserve Plc (the Company), the international support services and construction group, announces today, that it has entered into a conditional agreement with the trustee of the Pension Scheme (the Trustee), to transfer its remaining interest in a portfolio of 19 PFI assets (the PFI Assets), to the Trustee at a valuation of £55m.* The proposed transfer is conditional upon the approval from the shareholders of Interserve Plc at a General Meeting to be held on 7 January 2013.

Key Transaction Highlights

The proposed Transaction will:

  • Provide a significant contribution towards the current Pension Scheme funding shortfall; and
  • Crystallise further value from Interserve’s PFI investment portfolio.

In the financial year ended 31 December 2011, the Interests contributed £3.7 million of profit and as at 30 June 2012 had gross assets valued at £33.6 million.

Interserve has completed two previous transactions in relation to its PFI portfolio, announced in June and October. The combined effect of these transactions, including the proposed transaction, will be to have raised £124.5 million in cash, to reduce the actuarial deficit from £150 million to £95 million and reduce the annual deficit recovery payment from £23.2 million to £12.0 million per annum.

Commenting on the Transaction, Chief Executive Officer, Adrian Ringrose said:

“The transaction announced today is good news for both shareholders and members of our pension scheme. Through a series of transactions during 2012 we have realised significant latent value in our PFI portfolio and with today’s announcement are proposing to bolster our pension position. The conclusion of our triennial pension funding review, of which this transaction is an integral part, balances the interests of our pension scheme with our ambition to make further progress against our strategic growth plans.”

The Transaction, when aggregated together with the disposal of PFI interests to Dalmore, announced in October, will be of such a size as to require Shareholder approval under the Listing Rules. The Circular and Notice of General Meeting and the Form of Proxy, will shortly be available for viewing on the investors section of Interserve’s website.

A copy of the Circular and Notice of General Meeting and the Form of Proxy, will also be submitted to the National Storage Mechanism and will shortly be available for inspection at:

*PFI Holdings 2003 Limited holds the Interests in each of PFI Para (Holdings) Limited and PFI Custodial (Holdings) Limited, which together through subsidiaries hold the PFI Assets and the transaction is effected through the transfer of the entire issued share capital of Interserve PFI Holdings 2003 Limited, representing the majority of the Company’s PFI assets, to the Trustee