Economy and Infrastructure

15.03.19

Interserve to go into administration as rescue deal rejected

One of the largest providers of public services in the UK is to go into administration after its largest shareholder led a rebellion against its financial rescue plan.

Interserve has announced its parent company has applied for administration after its investors rejected the debt-for-equity rescue deal that would have handed control of the company to lenders.

The deal would’ve seen shareholders’ stake reduced to just 5%, and they voted nearly 60% against the plan at an emergency meeting.

Interserve has over 45,000 UK staff and holds contracts for cleaning schools, construction, probation, and healthcare.

In February, Interserve’s CEO Debbie White declared it had made a “significant step forward” as the provider tried to avoid a Carillion-style collapse as a rescue deal was reached with lenders.

But the government contractor’s largest shareholder, US hedge fund Coltrane, led a rebellion against the plans.

The ‘pre-pack’ administration means Interserve can continue trading and the firm says services will continue as normal.

The company said earlier today that the board of directors were convening at an urgent board meeting to consider its options, but has now announced that its parent company has applied for administration.

It said “This is part of an alternative deleveraging transaction which will restore the group’s balance sheet and provide additional liquidity.

“It is envisaged that the administrators, if appointed, will immediately sell Interserve’s business and assets to a new company, to be controlled by Interserve’s lenders.”

Following the sale, the intention is for an alternative transaction to be implemented involving the dividing of £485m of existing debt and the injection of £110m into the group, with the transaction expected to completed on or before Monday 18 March.

Interserve said: “The board believes this is the best remaining option to preserve value, protect the jobs of employees and ensure the group can carry on as normal with minimal disruption.”

Image credit - Steve Parsons/PA Archive/PA Images

Comments

There are no comments. Why not be the first?

Add your comment

 

public sector executive tv

more videos >

latest public sector news

Wiltshire Council withdraws £20m plans to close special schools and reopens consultation

26/03/2019Wiltshire Council withdraws £20m plans to close special schools and reopens consultation

Wiltshire Council has announced it is extending its consultation on controversial plans to restructure its special education services and has wit... more >
South Yorkshire leaders make breakthrough in £30m devolution deal

26/03/2019South Yorkshire leaders make breakthrough in £30m devolution deal

The four South Yorkshire council leaders and mayor Dan Jarvis have announced a “breakthrough” in the stalled devolution deal for Shef... more >
Council leader reinstated after online Tommy Robinson comments amid Tory Islamophobia row

26/03/2019Council leader reinstated after online Tommy Robinson comments amid Tory Islamophobia row

The Conservative council leader who was suspended for sharing a message supporting far-right activist Tommy Robinson has now been re-instated by ... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
Wiltshire Council withdraws £20m plans to close special schools and reopens consultation

26/03/2019Wiltshire Council withdraws £20m plans to close special schools and reopens consultation

Wiltshire Council has announced it is extending its consultation on controversial plans to restructure its special education services and has withdrawn its decision to close three special schools... more >
South Yorkshire leaders make breakthrough in £30m devolution deal

26/03/2019South Yorkshire leaders make breakthrough in £30m devolution deal

The four South Yorkshire council leaders and mayor Dan Jarvis have announced a “breakthrough” in the stalled devolution deal for Sheffield City Region. After “years of impa... more >

the raven's daily blog

Councils Can: LGA launches Spending Review campaign

18/03/2019Councils Can: LGA launches Spending Review campaign

Lord Porter, chairman of the Local Government Association, outlines his organisation’s campaign to make sure local government tops to government’s list for this year’s Spending Review. Our #CouncilsCan campaign to influence this year’s Spending Review is well underway and gathering momentum. The money local governm... more >
read more blog posts from 'the raven' >

comment

Camberley inspired: investment and regeneration

11/03/2019Camberley inspired: investment and regeneration

The decline of the Great British high street has been one of the greatest concerns for local councils in recent years, leading to some innovative... more >
Swindon's solar-powered recycling centre saves council cash

11/03/2019Swindon's solar-powered recycling centre saves council cash

Steve Cains, head of power solutions at Public Power Solutions, the wholly-owned subsidiary of Swindon Borough Council, describes the benefits of... more >
National Infrastructure Commission: Progressing the North

11/03/2019National Infrastructure Commission: Progressing the North

The National Infrastructure Commission’s (NIC) National Infrastructure Assessment was released in July 2018, making a variety of recommenda... more >
SARS II: Recovery made easy

11/03/2019SARS II: Recovery made easy

Paul Bentley, of the Crown Commercial Service (CCS), introduces us to the Spend Analysis Recovery Framework: a no win no fee means of carrying ou... more >

interviews

Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welcomed a new member to its team. Matt Spencer, O2’s head of public ... more >
Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need to invest in technology to help make better use of their resources. Bu... more >
New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has outlined his approach to culture and work with employees, arguing tha... more >
Keeping the momentum of the Northern Powerhouse

15/10/2018Keeping the momentum of the Northern Powerhouse

On 6 September, the biggest decision-makers of the north joined forces to celebrate and debate how to drive innovation and improvement through th... more >

public sector focus

View all News