Following speculation over the weekend, including a piece in the Financial Times that reported Interserve is in rescue talks as its tries to avoid the fate of Carillion, its shares plunged more than 70 per cent. The support services and construction group is said to be engaged in a debt-for-equity swap that would result in “material dilution for current Interserve shareholders”, details of which will be announced early next year.
The reports prompted Interserve to issue a press statement regarding plans to deleverage its balance sheet.
Debbie White, CEO of Interserve, said: “We are making good progress on our deleveraging plan which we expect to announce early in 2019. Our lenders are supportive of the deleveraging plan which will underpin the long-term future of Interserve. Our refinancing in April of this year contemplated the development of a deleveraging plan in consultation with our stakeholders and the liquidity injected at that point also gave us the funding to execute our business plan. Our discussions with our lenders are a positive step in the process that was agreed as part of the April refinancing. The Cabinet Office has also expressed full support for the work we are doing to implement our long-term recovery plan.
“The fundamentals of our business remain strong. The deleveraging plan will give Interserve a strong long-term capital structure and provide a solid foundation on which to build the future success of the Group.”
Meanwhile the group has confirmed it has been awarded a £25 million contract by Cwm Taf University Health Board, as part of the next phase of the £36 million redevelopment of Prince Charles Hospital in Merthyr which is funded by Welsh Government.
Works should start on the project in December 2018 with completion by spring 2021.
Interserve will also deliver the provision of a new staff changing area within the courtyard; construction of new plant rooms; refurbishment of first-floor main switch rooms; a new car park and external infrastructure works.