Interserve lenders are set to increase the stake that shareholders would own in the company from 2.5 per cent to 5 per cent under new terms for the £500m rescue package.
Lenders, which include hedge funds such as Angelo Gordon and Davidson Kempner as well as banks like RBS and HSBC, are discussing doubling equity owned by shareholders, according to Sky News.
A number of investors are willing to support the revised terms of the debt-for-equity swap but the orginal plan drew criticism from Coltrane, the company’s biggest shareholder, which has proposed an alternative restructuring plan.
Coltrane has submitted a plan to Interserve’s board that includes a £75m rights issue, according to Sky News, which would include major equalisation of Interserve’s debts.
As a result creditors would own 65 per cent of Interserve while funds raised would equate to 25 per cent of equity, leaving shareholders with 10 per cent.
Interserve is expected to publish the new proposal next week but declined to comment.
Despite the battle over the company’s future, lenders are reportedly likely to take control of Interserve through a pre-pack administration if Coltrane and others vote against the deal.
Coltrane was not available for comment and Angelo Gordon and Davidson Kempner did not immediately reply to request for comment.