Interserve employees are doing their best to show it’s “business as usual” for the firm after it was forced to enter administration on Friday (15 March) after shareholders voted in favour of rejecting the firm’s second rescue plan.
The successful sale of the group has been completed which saw administrators immediately sell Interserve’s business and assets to a new company, to be controlled by Interserve’s lenders. Only the plc business collapsed with the rest of the limited companies within the group remaining solvent and therefore providing continuity of service for customers and suppliers, bosses say.
The alternative transaction involves the equitisation of approximately £485m of existing debt and the injection of £110m of new money into the group.
A statement from the group said: “Interserve (in administration) has announced the successful completion of the sale of the group. This alternative deleveraging transaction will restore the Group’s balance sheet and provide additional liquidity. 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.”
It comes after an extraordinary general meeting that was held on Friday (15 March) saw 60% of shareholders vote against the board’s Deleveraging Plan that was put on the table. The deal would have seen shareholders keep just 5% of the company, with lenders splitting the rest between themselves.
But the firm has never managed to attain the backing of US hedge fund Coltrane Asset Management, which owns 28% of the firm and from the start has been against the financial restructuring plans.
More worryingly is the latest data revealed by the GMB Union which claims the major government contractor was handed £660m worth of public contracts in the run-up to its eventual collapse.
According to the Tussell, a data provider on UK government contracts, Interserve was handed public contracts worth £432m in 2017, and £233m last year.
Despite, posting profit warnings in May 2016, October 2017 and November 2018, the biggest government contract is believed to be in 2018 and awarded by the Foreign and Commonwealth office - £66m for total facilities management services in July.
The union has launched its Go Public campaign which calls for an end to outsourcing and privatisation in UK public services and for a better deal to the taxpayer.
Rehana Azam, GMB national secretary, said: "Awarding hundreds of millions in taxpayer funded contracts to troubled outsourcing companies is the height of irresponsibility. Interserve was clearly in trouble, and yet Ministers saw fit to hand it hundreds of millions of pounds of public money. What on earth were they thinking? This government’s obsession with outsourcing has now put another 45,000 jobs at risk, along with thousands more in the supply chain.”