Interserve, one of the Top 30 largest Security providers in the UK has reached an agreement with its creditors to deal with its rising debts. The firm’s lenders which include RBS, HSBC and BNP Paribas have agreed to help reduce its debts from £600m to around £275m by issuing £480m of new shares, to be swapped with its creditors for debt amounting to 97.5% of its entire share capital.
This deal is subject to the approval of Interserve’s current shareholders and will be finalised within the next few weeks.
Debbie White, CEO of Interserve in a Press Statement said:
“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.”
It is understood that the Cabinet Office has played a key role in these negotiations and continues to support the Deleveraging Plan for the Public Services Provider, whose Government Contracts currently account for 70% of the firm’s turnover.
Under this Rescue Deal, Interserve is also set to keep its most profitable asset: RMD Kwikform Construction Materials. As part of the transaction, £350m of existing debt will be put onto RMD Kwikform’s balance sheet and will be non-recourse to the rest of Interserve Group, with maturities being extended to 2023.
In a separate announcement, Interserve’s largest shareholder: Coltrane Master Fund, owning 15% of the company is seeking to oust eight of the company’s directors with the Exception of the Chief Executive. Recommending that David Frauman and Stuart Ross be appointed as directors, and is also calling for a general meeting on these resolutions.
Interserve Group currently employs 45,000 staff in the UK and 75,000 worldwide. Interserve has a market value of £20m, down from £500m in 2017, and a turnover of £3.2bn.