Warning of substantial loss for investors as company’s share price plummets by 75 per cent

A COMPANY with thousands of government contracts including some in Bristol has seen shares collapse by 75 per cent as it seeks its second rescue deal of 2018.

Interserve, which has offices in Clevedon and in Almondsbury, employs 20 people in Bristol and is behind the improvement works on the M5 at junction 6.

The company also has contracts serving meals in schools and cleaning hospitals, but is in £500million of debt.

Shares in the firm plummeted on Monday (December 10) to 6.5p - down 75 per cent. In 2014, shares at Interserve were worth more than 700p.

The contractor is battling to secure its second rescue agreement of 2018 and has admitted the deal will mean a substantial loss for shareholders.

Interserve has said it hopes to finalise the deal in early 2019.

It said: “Although the form of the deleveraging plan remains to be finalised, it is likely to involve the conversion of a substantial proportion of the group’s external borrowings into new equity, an element of which may be sold to existing shareholders and potentially other investors.”

Meanwhile, Labour has called for Interserve to be banned from bidding from any more government contracts until it is financially stable.

Jon Trickett, shadow minister for the Cabinet Office, 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.”

In November, Interserve revealed its debt was set to rise between £625million and £650million in 2018 amid project delays and a weak construction market.

The company has been under scrutiny since the collapse of rival Carillion last year.

Debbie White, chief executive of Interserve, added: “The fundamentals of our business remain strong.

“The deleveraging plan will give Interserve a strong long-term capital structure and provide a solid foundation on which to build the future success of the Group.”