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Interserve files for administration

Interserve will file papers at the High Court for the parent company to be placed into administration.

In an announcement to the market around 2pm, the company said it expected that once the request has gone through the entire group and its assets would be sold to a new company that would be controlled by its lenders.

EY has been lined up to carry out the administration.

Once the administration is complete an alternative deleveraging plan will be implemented by the new company.

The terms will be essentially the same as the deleveraging plan voted down today, with a £485m debt-for-equity swap in the new company and £110m of new lending made available.

The company made clear that the shareholders of Interserve were “not expected to receive any value for their shareholding”.

Interserve said in a statement: “The board believes this is the best remaining option to preserve value, protect the jobs of employees and ensure the group can carry on as normal with minimal disruption.”

Shareholders voted 59:41 against a plan to to cut Interserve’s debt but also the stake of shareholders this afternoon.

Coltrane Asset Management, which owed 28 per cent of the company, is understood to have voted against the deal.

It has spent tens of millions building its stake in the company since 2017 and now faces losing its entire investment.

AJ Bell investment director Russ Mould told Construction News the vote against the plan was “baffling”.

“If the company goes into administration the equity is worthless. Instead of 5 per cent of something [under deleveraging plan] they will have nothing.”

Interserve shares plunged more than 30 per cent on news of the result before they were suspended.

Earlier this week lawyers for Coltrane wrote to EY warning they must carry out a full marketing of Interserve once it was in administration rather than sell it in a pre-pack to its lenders.

Mr Bell suggested Coltrane might try to buy elements of the company if it could force such an open administration.

However, CN understands that the pre-pack sale to the lenders could only be stopped if a judge deems it unwarranted.

Follow our live coverage of Interserve’s administration.

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