5th Mar 2019 13:27
LONDON (Alliance News) - Interserve PLC on Tuesday said a proposal received from Coltrane Asset Management LP would require it to immediately halt the implementation of its previously announced deleveraging plan, but it will not comply.
Coltrane holds more than 5% of the support services firm's shares.
At the end of February, Interserve launched a GBP435.2 million fully underwritten share placing and open offer under its deleveraging plan.
This is pending shareholders approval at a general meeting on Friday next week. They face massive dilution and will own just 5% of the company afterwards.
Interserve shares were trading 13% higher on Tuesday at 17.82 pence each, giving it a market capitalisation of GBP473.1 million. The stock is up 58% in the past 7 days but still down 54% in the past 12 months.
The plan is a consensual restructuring of Interserve, which is "urgently" required to provide sufficient liquidity, cash and bonding facilities to allow the company to service short-term obligations and secure a stable platform, it said.
On Tuesday, Interserve said it is unable to consent to Coltrane's request without risking the future of the company together with its employees, pensioners, customers and suppliers.
Interserve also said that it has asked Coltrane for its consent to share Coltrane's proposal, but this request has been refused. Interserve, however, noted that the Coltrane proposal is non-binding and unfunded, and remains subject to due diligence. There is therefore no certainty that Coltrane's proposal could be successfully implemented, Interserve said.
Looking ahead, Interserve said it remains open to considering any proposal which provides liquidity and a deleveraging solution that is capable of implementation in the time frame available.
The company also highlighted that it continues to recommend that shareholders vote in favour of the deleveraging plan.
"This is a critical time for Interserve," said Chair Glyn Barker. "It [deleveraging plan] 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."
Barker added: "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."
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