Interserve: Major government contractor ‘seeks second rescue deal’
Interserve: Major government contractor ‘seeks second rescue deal’
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Among the company’s contracts is for cleaning at Network Rail stations
One of the UK’s largest providers of public services is seeking a rescue deal as it struggles with £500m of debt, according to the Financial Times.
Interserve, which works in prisons, schools, hospitals and on the roads, said it might look for new investment or sell off part of the business.
The company has tens of thousands of UK employees, including workers at the Foreign Office and the NHS.
Its share price dropped to a 30-year low last month.
The Financial Times reported that the company was looking for a deal to refinance its debt which would mean lenders taking a significant loss while public shareholders would be “virtually wiped out”.
Despite lucrative contracts in the Middle East and its wide range of work in the UK, the company has continued to lose money since March, when it agreed an earlier rescue deal.
Its troubles have been blamed on cancellations and delays in its construction contracts as well as struggling waste-to-energy projects in Derby and Glasgow.
In a statement, Interserve said: “The fundamentals of the business are strong and the board is focused on ensuring Interserve has the right financial structure to support its future success.”
The company said its options included bringing “new capital into the business and progressing the disposal of non-core businesses “.
Following that, the government launched a pilot of “living wills” for contractors, so that critical services can be taken over in the event of a crisis. Interserve is one of five suppliers taking part.
A Cabinet Office spokesperson said: “We monitor the financial health of all of our strategic suppliers, including Interserve, and have regular discussions with the company’s management. The company successfully raised new debt facilities earlier this year, and we fully support them in their long term recovery plan.”
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