One of the UK’s largest providers of public services, Interserve, has signed a new deal with its creditors to avoid its collapse.
This new deal secures a much-needed rescue plan which involves cutting the company’s debts from over £600m to around £275m. This has been achieved by issuing new shares in Interserve.
The key commercial terms of the ‘Deleveraging Plan’ have been agreed in principle with all of Interserve’s lenders, bonding providers and the Pension Trustee.
The Interserve board believes that the plan will provide the company with a strong balance sheet and the platform to deliver on its strategy going forward.
Debbie White, CEO of Interserve, said: “Agreeing the key commercial terms of the Deleveraging Plan with our lenders, bonding providers and Pension Trustee is a significant step forward in our plans to strengthen the balance sheet. The Board believes that this agreement will secure a strong future for Interserve.
“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.”
Interserve is a major governmental contractor and plans to issue over £480m worth of new shares, which will be swapped to creditors for debt, leaving current shareholders with almost nothing.