News

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 news

View all News

comment

Cities as places of opportunity

29/04/2019Cities as places of opportunity

Andrew Carter, chief executive of Centre for Cities, asks: if cities are pl... more >
Shaping healthy places with district councils

29/04/2019Shaping healthy places with district councils

District councils are achieving excellent outcomes by shifting health solut... 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 feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... 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 open more > more last word articles >

interviews

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 ... more >

the raven's daily blog

Empower your reader, choose print

07/05/2019Empower your reader, choose print

We are on a digital rollercoaster, swirling and twirling through a variety of different online advertising platforms – have we forgotten about traditional marketing plat... more >
read more blog posts from 'the raven' >

public sector events

events calendar

back

May 2019

forward
mon tue wed thu fri sat sun
29 30 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2
3 4 5 6 7 8 9

featured articles

View all News