Interserve share price hits new lows: But hits back by insisting refinancing has not “stumbled” and talks are proceeding on time | City A.M.
Troubled support services giant Interserve has come out fighting, insisting crucial talks with banks have not “stumbled”.
Interserve is trying to agree new financing terms with its syndicate of lenders after delivering a profit warning last September.
In December Interserve agreed a £180m emergency financing package. The funds came after the outsourcer said in October it was in danger of breaching covenants. The short-term funding is due to be repaid in March.
It was reported earlier today Interserve was “struggling” to strike a deal with lenders, which have been “spooked” by Carillion’s collapse.
However, this afternoon a spokesperson for Interserve said: “We do not in any way recognise the assertion that our discussions with lenders on long-term financing have stumbled.”
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Business plan
Interserve’s plight is pitting the same accountants – EY and PwC – against one another that represented key parties in the run-up to Carillion’s demise. PwC is supporting the company while EY is representing the eight-bank syndicate.
The outsourcer’s business plan – which will underpin any refinancing package – was presented to the banks one day after Carillion failed in mid-January.
Sources familiar with the situation said contrary to the reports in the Sunday Telegraph, talks were progressing well and with draft banking terms already being shared.
The expiry of the short-term refinancing package means terms must be agreed by the end of March.
Interserve employs around 25,000 people in the UK and 80,000 people worldwide. Shares hit an all-time low this week with demand from hedge funds outstripping supply.
The Interserve spokesperson said: “Discussions remain positive, are proceeding to our planned timeframe and we remain confident of reaching a positive outcome.”
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