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.