Interserve’s Shareholders Refuse Rescue Deal: Interserve future to be determined

Interserve Group, a UK Top 5 Security Company and wider provider of services has announced that pending an urgent meeting to consider any other viable options; the Board intends to apply to the High Court in London for the Company to be placed into administration.

It is understood that in the event that administration goes ahead, ownership will fall to lenders, but the company will continue trading and operating public services.

The ‘Pre-pack’ administration deal organised in advance of today’s vote will, if actioned, be run by EY and would keep Interserve’s public services running over the administration process.

As of today, trading in Interserve shares has been immediately suspended pending administration or sale that will see its various divisions and 45,000 UK staff protected.

Today at a General Meeting between Interserve’s Board Members and Existing Shareholders, a vote took place on whether to pass the ‘Deleveraging Plan’ agreed between Interserve’s Board and the Company’s Lenders, with assistance from the Cabinet Office.

Over 59% of shareholders rejected the restructuring proposal; a debt-for-equity swap with Interserve’s lenders that would have seen shareholder’s holdings fall to just 5% of their original stake.

In a Statement issued this afternoon by the board they outlined their next steps were “likely to involve the Company making an application for administration and, if the order is granted, the immediate sale of the Company’s business and assets (i.e. the entire Group) to a newly-incorporated company, to be owned by the existing lenders.  This transaction would achieve substantially the same balance sheet and liquidity outcomes for the Group as the Deleveraging Plan.”

Coltrane Asset Management, Interserve’s largest Existing Shareholder (27.7% stake), voted against in the vote today and has been aggressively opposing the Rescue Plan since its initial announcement by Interserve. Going as far as to threaten legal action against the firm’s Board in reparation for their investments.

According to a City A.M Magazine source, “there is a significant chance Coltrane would seek to buy parts of the business to seize control.”

According to Sky News, it is understood that MITIE’s CEO, Phil Bentley has submitted an acquisition proposal of between £100M – £150M, which it is anticipated the Interserve Board will reject.

Interserve Group currently employs 45,000 staff in the UK and 75,000 worldwide, and has a turnover of £3.2bn.