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Thu March 21 2019

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Interserve faces battle to win over shareholders

5 Mar If Interserve shareholders do not vote in favour of the board’s restructuring plan at a meeting on 15th March, the company will be placed into administration. So far, the shareholders are proving resistant.

On 6th February Interserve announced restructuring plans that centred on lending banks being given equity in the business in exchange for cancelling debt, leaving shareholders with just 2.5% of the business. After shareholders indicated that they could not support that deal, the board came back on 22nd February with a less sour deal that left shareholders with 5%.

However, shareholders – led by New York hedge fund Coltrane Asset Management, which currently owns 27% of Interserve – have again signalled that they are having it.

Coltrane has, for a second time, tabled an alternative proposal that would leave shareholders with 37.5% of the business in a bid to get the board to revise it plan.

In response, the board said: “Following the announcement of 22nd February 2019, the Board has received an updated proposal from Coltrane Asset Management LP, which it is considering. A further announcement will be made in due course.  In the meantime, the board remains committed to achieving a consensual deleveraging plan.”

EY has reportedly been lined up to handle the administration of Interserve with a pre-pack deal, should shareholders hold out against the board's debt to equity swap plan.


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