Interserve has provisionally agreed a deal with its lenders to swap £480m of its debt for new equity.
This will give Interserve’s current lenders control of 97.5 per cent of the company, based on the value of its issued shares, LGC’s sister title Construction News reports.
Lenders have also agreed to give the company a further £75m in borrowing, with a payback date of 2022.
Around £350m of remaining debt will be shifted within the group to the RMD Kwikform business and had its maturity extended to 2023.
If the deleveraging plans goes ahead as planned the group’s net debt willl stand at around £275m, down from around the £650m that it revealed in November. With the debt sitting with RMD excluded, the remaining group will have a net cash position of around £60m.
Chief executive Debbie White said: “The board believes that this agreement will secure a strong future for Interserve.
“This proposal has been achieved following a long period of intensive negotiation and has the support of our financial stakeholders and government.
“Its successful implementation is critical to the Interserve’s future and all of its stakeholders.”
Interserve will seek approval for the plan from its current shareholders who face an enormous dilution in their holdings. The company said it is making plans to force through the deal in the event shareholders rebel against the deleveraging plan.
One of the company’s largest current shareholders has now called for a general meeting to fire almost the entire company board.
Coltrane Master Fund wants the entire board bar chief executive Debbie White (pictured) to be removed. It also wants David C. L. Frauman, a partner with American law firm Allen & Overy, and Stuart Ross be appointed as new directors.
Interserve said it was speaking with its advisers and would provide an update on a general meeting in due course.