Fears grow over future of Interserve
Support services and construction group Interserve, which has a strong presence across the West Midlands, has rejected a revised restructuring package tabled by one of its key shareholders, renewing fears that the firm could collapse.
Interserve said a proposal received from New York hedge fund Coltrane, which owns more than 27 per cent of the firm, would risk the future of the company together with "its employees, pensioners, customers and suppliers".
It would also require Interserve to immediately halt the implementation of its previously announced plan, which will see existing investors almost wiped out with their holdings slashed to five per cent.
Coltrane favours a restructure that would see investors end up with 35 per cent control of Interserve. But Interserve said it was unable to consent to the revised terms.
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 chairman Glyn Barker said: "The proposed deleveraging plan, recommended by the board, is the result of a long period of intensive negotiation to align stakeholders behind a plan to strengthen the balance sheet and secure a strong future for the business.
"It is the only plan today that provides a certain future for Interserve, preserving some value for shareholders while securing jobs, pensions, and continuity of services."
The Government contractor is grappling with a near-£650 million debt mountain and shareholders are set to vote on its proposal on March 15.
The group, which holds crucial contracts for a range of services in prisons, schools and hospitals, is also proposing to issue £435 million of new equity as part of the arrangement.
If a deal is approved, Interserve's net debt will be substantially reduced, putting the firm on a more secure financial footing.
However, if the firm fails to reach a restructuring agreement, it has lined up EY to act as administrator, raising fears of a Carillion-style collapse for its 25,000 UK workers.
