Interserve’s vast savings in debt plan

INDUSTRIAL giant Interserve could slash its interest rate bill by as much as £60million a year if it can persuade its lenders to swap a chunk of its mounting debt pile for shares in the business.

The company employs 45,000 workers in Britain and its largest customer is the Government. It said last week it will consider ‘all options’ as part of rescue plans.

The outsourcing firm, which cleans hospitals and serves school meals, has debt of £650million. It is speaking to lenders – which include RBS, HSBC, BNP Paribas, Emerald Asset Management and Davidson Kempner Capital – about a possible debt-for-equity swap which could significantly reduce the £80million it pays in interest every year.

Interserve is understood to be in regular dialogue with the Cabinet Office and Ministers are thought to be satisfied that the company is unlikely to share the same fate as Carillion which spectacularly failed in January.

However, analysts said the firm’s construction side may have to be hived off to stabilise the business.

The shares closed at 13p on Friday, valuing it at £20 million.