Tuesday 12 February 2019 6:53 pm

Interserve rescue plan: Shareholder rebellion grows as dissenting hedge fund recruits another supporter

The hedge fund trying to thwart Interserve's rescue deal designed to avoid it facing the same fate as Carillion has attracted the support of another major shareholder.

Last week Coltrane Asset Management, a 27 per cent shareholder in the firm, launched a bid to oust all members of the outsourcer's board except chief executive Debbie White after the firm announced the details of a deleveraging plan with its lenders.

Dutch hedge fund Farringdon Capital Management, which owns 6.2 per cent of Interserve, has also now thrown its weight behind the rebellion. 

Bram Cornelisse, chairman of Farringdon, told City A.M. this evening the fund is "supporting the efforts of Coltrane to achieve a more equitable outcome for shareholders compared to the deal suggested by management which hands almost the entire company to the debt holders".

A well-placed source added Farringdon has also written directly to the outsourcer on the matter.

Interserve declined to comment.

A vote will now take place in March, in which Interserve needs the support of half its shareholders to go ahead with the rescue deal. Coltrane and Farringdon’s combined stake is around one-third.

Interserve’s rescue deal stoked fury at Coltrane last week because it proposed all but wiping out existing shareholders’ stake in the outsourcer, whittling it down to just 2.75 per cent, while lenders including RBS, HSBC and BNP Paribas will be handed control.

Coltrane subsequently wrote to the firm demanding a general meeting, and calling for the heads of directors Glyn Barker, Mark Whiteling, Russell King, Anne Fahy, Nick Salmon, Gareth Edwards, Dougie Sutherland and Nicholas Pollard. It said Interserve should replace them with two rescue specialists, David Frauman and Stuart Ross.

Sutherland also announced he is stepping down from the board today, and will leave his role as a director at the end of February, though an insider insisted his decision was "not in any way related" to Coltrane's demand.

Debbie White, chief executive of Interserve and the architect of the rescue deal, continues to have shareholders' backing, according to the firm.

Workers at the NHS and the Foreign Office are among Interserve’s 45,000 UK employees, and 70 per cent of its annual £3.2bn turnover comes from the government. Among its contracts, it carries out maintenance on 1,100 offices and depots for the Department of Transport. It also provides school meals, facilities management and construction work.