Troubled infrastructure and services firm Interserve has rejected counter-proposals from its largest shareholder to scrap its deleveraging plans.
As the UK infrastructure sector goes through a credit crunch in the wake of the collapse of Carillion and major firms scramble to get large debt piles off their books, Interserve is attempting to negotiate a £632m debt.
Just as with Carillion, the firm holds a swathe of public sector contracts.
Proposals drawn up by Interserve’s lenders, which include major UK banks such as RBS and HSBC, would cancel £485m of debt in exchange for a controlling stake in the company.
However shareholders including Coltrane have threatened to vote down the strategy, which would leave them with a 5% stake and the right to buy new shares to a maximum of 33.3%. A vote is scheduled to take place on 15 March.
Coltrane had launched a counter-proposal that would have cut the debt, issued new shares worth around £110m and would have seen Coltrane provide liquidity of around £66m.
In a statement, Interserve said: 'The Board continues to recommend that shareholders vote in favour of the Deleveraging Plan, which is currently the only plan that is capable of implementation in order to provide sufficient liquidity, cash and bonding facilities to allow the Group to service short-term obligations and secure a stable platform for the business.'
Glyn Barker, chairman of Interserve, said: 'This is a critical time for Interserve. 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.
'In the absence of any other plan that is capable of implementation, further uncertainty continues to risk an outcome in which there is no return to shareholders, including Coltrane, and considerable disruption to the business.
'The Board considers the Deleveraging Plan to be in the best interests of Interserve and all its stakeholders, including shareholders, as a whole. Accordingly, the Board continues to unanimously recommend that shareholders support the Deleveraging Plan and vote in favour on 15 March.'
Register now for full access
Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.
Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors.
Use the link below to register your details for full, free access.
Already a registered? Login
