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Interserve shares plummet 75%

Interserve’s share price has fallen by three-quarters this morning, following confirmation it was in talks with lenders regarding a debt-for-equity deal.

The drop comes after Interserve confirmed it was in talks with lenders to refinance the business

The resulting sell-off saw the share price fall to just 6p as of 0815am, a 75 per cent drop from the 24.50p closing price on Friday.

By 1230pm on Monday, the share price had rebounded to 11.99p.

This comes as the Labour Party has also called on Interserve to be temporarily banned from bidding on public contracts until its long-term financial health is secured.

Shadow minister for the cabinet office Jon Trickett MP has called for a review of current government contracts held by the contractor along with the ban.

Mr Trickett made the call as Interserve confirmed it was in talks with lenders regarding a debt-for-equity swap.

In November, the contractor’s share price hit an all-time low following reports the company was preparing to ask investors for more cash.

“Less than two weeks ago, I asked the government what extraordinary steps they are taking to monitor the financial health of Interserve,” the shadow minister said.

“The government must take urgent steps to ensure all existing contracts with Interserve are reviewed and that they are prevented from bidding for public sector contracts until they have proved they are financially stable and there is no risk to the taxpayer.”

Mr Trickett said that he’d previously submitted a written question asking the government about how they were monitoring Interserve to the cabinet office.

The government responded by saying that they “do not believe that any strategic supplier is in a similar situation to Carillion”

Last month, Labour MP James Frith asked business secretary Greg Clark give assurances that Interserve “would not go the way of Carillion” in the House of Commons.

Mr Frith called on Mr Clark to state whether he would “commit to press Interserve to make sure subcontractors are paid up to date and are not at risk of carrying the can for another outsourcing collapse?”

The business secretary responded by stating that there was nothing “further to report” in relation to the contractor.

Interserve has been contacted for comment.

Interserve shares plummet 75%

Readers' comments (1)

  • With news like that it's probably about time for Ms. White and the rest of the board to pay themselves another round of bonuses!

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