15th Mar 2019 18:09
LONDON (Alliance News) - Troubled support services firm Interserve PLC said after the market close Friday it had entered administration and been sold to its lenders after investors rejected a proposed share placing as part of its "urgent" deleveraging plan.
Interserve explained administrators had been appointed and the business had been sold immediately to a "newly incorporated company to be controlled by the group's lenders."
This process had allowed it to "continuity for customers and suppliers" as well as "protecting" its employees and pension scheme beneficiaries.
"A deleveraging transaction will now be implemented, and is expected to complete shortly after the sale of the group, and will involve the equitisation of approximately GBP485 million of existing debt and GBP110 million of additional liquidity," Interserve explained in a statement.
"Under new ownership, the group will have a strong balance sheet, competitive financial structure and a fundamentally solid foundation from which to deliver on its long term strategy," the firm added.
"With a stronger financial platform in place, Interserve will be able to concentrate on delivering value for our customers," Interserve Chief Executive Officer Debbie White said.
White continued: "The group's transformation programme will continue, focused on improving our value propositions for customers, standardising our operational delivery, making Interserve simpler and more efficient through our Fit for Growth initiatives, and embedding a culture of ownership and openness throughout the group."
"Interserve is fundamentally a strong business and with a competitive financial platform in place we see significant opportunities ahead as a best-in-class partner to the public and private sector," White added.
The news follows a busy day for former FTSE 250-listed Interserve after it was forced to move towards administration and a sale of the business after investors rejected a share placing that formed a core part of its deleveraging plan.
In late February, Interserve proposed a GBP435.2 million fully underwritten share placing and open offer. The proceeds were to be raised as part of a deleveraging plan which the firm described as "urgently" needed to provide sufficient liquidity to service its short-term obligations.
Earlier on Friday, however, 59% of its shareholders voted against the plan to issue shares. Only 41% approved.
Following the defeat of share placing, Interserve confirmed its shares had been suspended from trading on the London Stock Exchange.
Interserve added earlier in the day that the present transaction "would achieve substantially the same balance sheet and liquidity outcomes for the group as the deleveraging plan" which was rejected by investors would have done.
Shares in Interserve - prior to being suspended - had been trading 34% lower at 6.30 pence each. A year ago, shares were trading 69.10p and hit a 80.45p high in April 2018.