CONSTRUCTION and services business giant, Interserve PLC is preparing to enter administration today as its shareholders voted down a rescue plan.
Admitting “the company is in a critical financial situation”, the Interserve board had put to the vote a ‘deleveraging plan’ to raise £435m through a share issue to meet its short-term debts.
However, shareholders today voted by 59% to reject the proposal forcing the company’s shares to be suspended at 12.35pm today.
Interserve directors have said they intend to hold an “urgent” board meeting to “consider its options.”
Interserve plc will now separate the parent company which will enter administration, leaving its subsidiary to continue operating and its employment of 68,000 workers.
Interserve employees are expected to continue working normally, delivering the company’s public sector critical services including hospital cleaning and probation services.
In a statement, the company says,
“It is envisaged that, immediately following the administration order being made, Plc’s business and assets will be sold to a newly incorporated company which will ultimately be controlled by the Group’s existing lenders.”
The new company will then set about issuing £485m new shares to raise funds to meet debts as well as £110m further borrowing and operation £1bn of other existing debt.
Carry on as normal
The Board states: “completion of this alternative deleveraging transaction is anticipated to occur shortly after the completion of the sale of the Group. 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.”
Unite national officer Colenzo Jarrett-Thorpe said: “Interserve’s management has portrayed this as business as normal but this is anything but normal. Workers are being asked to deliver vital public services without knowing who their employer will be and whether they will continue to have a job in the future.
“The government must step in and ensure that services continue and that workers are treated with dignity and respect. Once again, we have seen the government’s outsourced model fail.
“The government has been asleep at the wheel since Carillion’s collapse last year and if no action is taken, we face further corporate collapses.”
Interserve’s business roots were in construction and the company has completed major infrastructure projects such as the Junction 6 of the M5 near Worcester and refurbishing the Rotherham Interchange bus station in Yorkshire.