6th Feb 2019 08:24
LONDON (Alliance News) - Interserve PLC on Wednesday confirmed a shareholder is seeking to remove its entire board, bar the CEO, while it has also agreed a plan to issue a significant amount of new equity, diluting existing shareholders significantly.
Coltrane Master Fund LP, which holds "in excess" of 5% of the support services firm's shares, has called a meeting to remove Chair Glyn Barker, Chief Financial Officer Mark Whiteling, Senior Independent Director Russell King, Executive Director Dougie Sutherland, as well as Non-Executive Directors Anne Fahy, Nick Salmon, Gareth Edwards, and Nicholas Pollard.
One name not on the list, however, is Chief Executive Debbie White. Coltrane "continues to support her", Interserve said.
Coltrane wants David Frauman and Stuart Ross elected to the board. Frauman is currently the managing director of Steinhoff Finance Holding GmbH and Steinhoff Europe AG, two subsidiaries of struggling Johannesburg-listed retailer Steinhoff International Holdings NV.
Since December 2017, Steinhoff has been seeking a restructuring of these two subsidiaries following accounting discrepancies which came to light at the time. Frauman has been at Steinhoff Finance and Steinhoff Europe since June 2018, a month in which creditors decide to back the two subsidiaries' restructurings.
In a separate announcement, Interserve said it has agreed in principle all commercial terms for its debt-for-equity swap with lenders, bonding providers, and its pension trustee.
Net debt will reduce to around GBP275 million through the issue of around GBP480 million of new equity. This will account for 98% of Interserve's share capital, it said, and all proceeds will be used to repay senior debt.
The plan will see RMDK Kwikform remain with Interserve, with GBP350 million of existing debt allocated to that construction and engineering subsidiary. Of that, GBP169 million will be cash-pay and the rest into a subordinated non-cash pay debt instrument.
The debt will have its maturities extended to 2023.
Following the move, Interserve will have a pro forma net cash position of around GBP60 million, excluding RMDK.
Interserve also will be given GBP75 million of new funding via a net debt facility maturing 2022, and it will also receive new bonding facilities.
Shares were up 7.3% lower on Wednesday at a price of 14.13 pence each.