Reports of takeover bids as EY sells Interserve out of administration

The contractor filed for administration on Friday after shareholders voted down a deleveraging plan put forward by the Board to rescue the firm.

Administrators EY immediately sold the business to a new company to be controlled by Interserve’s lenders, kick-starting the implementation of an ‘alternative deleveraging transaction’.

The contractor said the deleveraging plan will restore the group’s balance sheet and provide additional liquidity.

A statement on Interserve’s website added: “The administrators have immediately sold Interserve’s business and assets to a new company, to be controlled by Interserve’s lenders. All companies in the group other than the parent company will remain solvent, providing continuity of service for customers and suppliers.

“The alternative transaction involves the equitisation of approximately £485 million of existing debt and the injection of £110m of new money into the group. Completion of the transaction is anticipated to occur on or before Monday 18 March.

“The group 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.”

Chief executive officer Debbie White said: “With a stronger financial platform in place, Interserve will be able to concentrate on delivering value for our customers. The group’s transformation programme will continue, focused on improving our value propositions for customers, standardising our operational delivery, making Interserve simpler and more efficient through our Fit for Growth initiatives, and embedding a culture of ownership and openness throughout the group.

“Interserve is fundamentally a strong business and with a competitive financial platform in place we see significant opportunities ahead as a best-in-class partner to the public and private sector.”

A spokesman for EY said: “The transaction has enabled rest of the Interserve Group to access the required additional £110m of liquidity, as well as implement the debt for equity swap and reduce the indebtedness of the group by some £480m.

“These actions avoided the significant loss to creditors that would have resulted from a collapse of the group and secured the jobs of some 68,000 employees worldwide.”

Meanwhile Sky News has reported that Mitie is considering a bid of around £100m for Interserve’s facilities management business.

However, it is reported the new owners value the business at closer to £300m.

FM specialist Serco has also enquired about a potential takeover of the business, The Sunday Times reported.