Interserve agrees rescue deal with lenders
Support services and construction group Interserve, which has a strong presence across the West Midlands, has unveiled plans to slash its near-£650 million debt mountain.
The Government contractor has agreed a debt-for-equity swap with its lenders, which means the likes of RBS, HSBC and BNP Paribas – together with Emerald Asset Management and Davidson Kempner Capital – will seize control of the firm.
Under the terms of the deal, existing shareholders will be wiped out and Interserve's net debt will reduce to £275 million.
The group, which holds crucial contracts for a range of services in prisons, schools and hospitals, will also issue £480 million of new equity as part of the arrangement.
The group has a worldwide workforce of around 75,000 including 2,000 in the West Midlands.
It has its new regional office near Birmingham Airport and employs hundreds at nursing agency Interserve Healthcare in Telford and in cleaning and maintenance at Russells Hall Hospital, Dudley.
It also owns specialist construction firm RMD Kwikform in Aldridge and has offices in West Bromwich.
Interserve's lucrative building materials division, RMD Kwikform, will remain part of the group as part of its plans.
However, one of the firm's existing shareholders, the New York hedge fund Coltrane, has reacted angrily, calling for several directors to be removed from the company's board and install David Frauman and Stuart Ross in their stead.
But Debbie White, Interserve chief executive, said: "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."
The restructuring comes at a sensitive time for the outsourcing sector, following the collapse of Wolverhampton-based Carillion last January, which led to thousands of job losses.
