Sale of Interserve completes

Contracting firm Interserve, which has many Yorkshire projects within its current pipeline, has moved to a new company after administrators were appointed on Friday.

Shareholders rejected a rescue deal for the company – voting 59% against the plan to address its debt – which led to administrators EY being installed on Friday morning. Assets were moved  to a group controlled by Interserve’s lenders.

Interserve, which manages construction projects and has contracts to to run probation and catering services, said that the deal would protect services and jobs. Projects include the construction of Rotherham bus station and a new £12m pedestrian bridge in Hull among others in Yorkshire; the firm also has cleaning contracts across Network Rail.

The plan would have seen their stake reduced to 5%, with lenders being handed the majority share of the business.

After the vote, Interserve said that “in the absence of any viable alternative” rescue plan it would formally apply to the High Court to go into administration.

EY was appointed to conduct a pre-pack administration.

On Friday evening, Interserve announced the completion of the sale of the Group, other than Plc, to a newly incorporated company, Montana 1 Limited  – which will be renamed as Interserve Group Limited. 

Interservce said: “The sale of the Group completed on Friday 15 March immediately following the appointment of the administrators, minimising any disruption to the business, providing continuity for customers and suppliers, and protecting the Group’s employees (including the beneficiaries of the Group’s pension schemes). 

“The transfer of ownership to Interserve Group enables a deleveraging of the Group to provide the business with a strengthened balance sheet and a more competitive financial structure to support its future growth.  This deleveraging transaction is expected to complete shortly after the completion of the sale of the Group.  At completion, Interserve Group will be owned by the Group’s lenders.”

Lenders now in control of Interserve Group include banks RBS and HSBC, and investors Emerald Asset Management and Davidson Kempner Capital.

Debbie White, Chief Executive Officer, Interserve Group said: “With a stronger financial platform in place, Interserve will be able to concentrate on delivering value for our customers. 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.”

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