In­ter­serve lenders seek to wrest back con­trol

The Sunday Telegraph - Money & Business - - Front page - By Jil­lian Am­brose

IN­TER­SERVE’S largest lenders are plot­ting to wrest con­trol of the out­sourcer in a debt for eq­uity deal that would see long-suf­fer­ing share­hold­ers wiped out.

The Sun­day Tele­graph un­der­stands In­ter­serve’s lenders have lost faith in the trou­bled com­pany’s man­age­ment since its first round of res­cue talks ear­lier this year.

Banks in­clud­ing RBS, HSBC and BNP Paribas, to­gether with Emer­ald As­set Man­age­ment and David­son Kemp­ner Cap­i­tal, in­tend to force a fresh debt deal on the com­pany which will hand con­trol to the lender group.

The fresh re­struc­tur­ing will in­clude a debt for eq­uity swap set to de­liver heavy losses for its in­sti­tu­tional in­vestors and all but wipe out value for pub­lic share­hold­ers.

It fol­lows just months af­ter the lender bloc through a fi­nan­cial life­line to the out­sourcer to avoid a Car­il­lion­style col­lapse. Since then the com­pany has re­vealed that its grow­ing debt pile will climb higher than first thought to be­tween £625m to £650m for the year.

A spokesper­son said: “Since Sept 2017, new man­age­ment have re­duced costs, sig­nif­i­cantly in­creased op­er­at­ing profit, and se­cured fi­nanc­ing al­low­ing time to ne­go­ti­ate a more sus­tain­able, long-term cap­i­tal struc­ture. Man­age­ment and lenders con­tinue to work con­struc­tively to­gether and, as pre­vi­ously stated, In­ter­serve will an­nounce a delever­ag­ing plan in early 2019. The fun­da­men­tals of the busi­ness are strong and the Board is fo­cused on se­cur­ing the right fi­nan­cial struc­ture to ensure In­ter­serve’s fu­ture suc­cess.”

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