The Board believes the Deleveraging Plan which is expected to reduce net debt to c.£275 million through the issue of c.£480 million in equity will provide Interserve with a strong balance sheet and the platform to deliver on its strategy.
It added RMDK will remain part of the consolidated Interserve Group. As part of the transaction, £350 million of existing debt will be allocated to RMDK, of which £169 million will be cash-pay and £181 million will be converted into a subordinated non-cash pay debt instrument. The debt allocated to RMDK will be non-recourse to the rest of Interserve Group and have maturities extended to 2023.
Existing lenders will provide an additional £75 million of new liquidity through the provision of a new debt facility with a maturity of 2022, with bonding providers providing additional bonding facilities to Interserve as required by its business plan.
Debbie White, CEO of Interserve, said: “Agreeing the key commercial terms of the Deleveraging Plan with our lenders, bonding providers and Pension Trustee is a significant step forward in our plans to strengthen the balance sheet. The Board believes that this agreement will secure a strong future for Interserve.
“This proposal has been achieved following a long period of intensive negotiation and has the support of our financial stakeholders and Government. Its successful implementation is critical to the Interserve Group’s future and all of its stakeholders. The Deleveraging Plan will, alongside our ‘Fit for Growth’ transformation programme, place us in a strong position to deliver our strategy, be competitive in the marketplace and provide a secure future for the Interserve Group’s employees, customers and suppliers.”
Interserve expects to launch the finalised Deleveraging Plan in the next few weeks subject to approval by its shareholders.
However, in a separate statement also issued today, Interserve announced that it had received a letter from Coltrane Master Fund, a shareholder holding in excess of five per cent of the paid up capital of the Company, requisitioning a General Meeting of the Company’s shareholders.
The Requisition Notice proposes resolutions that Glyn Barker, Mark Whiteling, Russell King, Anne Fahy, Nick Salmon, Gareth Edwards, Dougie Sutherland and Nicholas Pollard be removed as directors of the Company.
Coltrane continues to support Debbie White, CEO, of Interserve and the Requisition Notice does not seek her removal.
The Requisition Notice proposes resolutions that David C.L. Frauman and Stuart Ross be appointed as directors of the Company.
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