Control of UK-headquartered international support services, construction, and equipment services company, Interserve, which provides a range of construction and facilities management services to the healthcare sector, has moved to a new company after administrators were appointed.
The news follows shareholders’ rejection on 15 March of a rescue deal for the company – which has 45,000 UK staff, and 68,000 employees globally. According to a BBC story, Interserve: UK contractor completes fast-track sale, published on 15 March, ‘shareholders voted 59.38% against a rescue plan to address Interserve's mounting debt pile’. The BBC said the plan would have seen their stake reduced to just 5%, ‘with lenders being handed the lion’s share of the business’. The story, published online, added: “But after the vote, Interserve said that ‘in the absence of any viable alternative’ rescue plan it would formally apply to the High Court to go into administration.”
Ernst & Young was appointed under a so-called ‘pre-pack administration’, an insolvency procedure in which a company arranges to move its assets to another owner before administrators are officially appointed. Under the pre-arranged agreement, the administrators were installed and the assets moved immediately to a group controlled by Interserve's lenders. The BBC said that Interserve had ‘insisted that the deal would protect services and jobs’.
In its own press announcement, Interserve said it had appointed Alan Hudson and Hunter Kelly of Ernst & Young as administrators to Plc and the successful completion of the sale of the Group, other than Plc, to a newly incorporated company, Montana 1 Limited (which it said was ‘in the process of being renamed as Interserve Group Limited’). The press release said: “The sale of the Group, completed on Friday 15 March immediately following the appointment of the administrators, will minimise any disruption to the business, provide continuity for customers and suppliers, and protect the Group's employees (including the beneficiaries of the Group’s pension schemes).
“The transfer of ownership to Interserve Group enables a deleveraging of the Group to provide the business with a strengthened balance sheet and a more competitive financial structure to support its future growth. This deleveraging transaction is expected to complete shortly after the completion of the sale of the Group. At completion, Interserve Group will be owned by the Group's lenders.”
Following completion of the deleveraging transaction, Interserve Group would, the announcement said, be ‘a well-capitalised, leading support services, construction, and equipment services company’, consisting of:
‘a leading support services business in the UK and Middle East, with excellent positions in growing markets and strong cash flow and significant margin improvement potential’;
‘a robust construction business, with a clear strategy to use Interserve's market position to focus on the most attractive and lower risk opportunities in construction, building fit-out, and infrastructure services, predominantly in the UK’; and
‘a leading equipment services business, which solves complex engineering problems for its customers, through the application of world-class design and logistics capabilities, backed up by an extensive fleet of specialist equipment’.
Under new ownership, the Group would have ‘a strong balance sheet, competitive financial structure, and a fundamentally solid foundation from which to deliver on its long term strategy’. The company said it was ‘business as usual’ for employees, customers, suppliers, and other stakeholders.
Debbie White, CEO, Interserve Group said: “With a stronger financial platform in place, Interserve will be able to concentrate on delivering value for our customers. The Group's transformation programme will continue, focused on improving our value propositions for customers, standardising our operational delivery, making Interserve simpler and more efficient through our Fit for Growth initiatives, and embedding a culture of ownership and openness throughout the Group. Interserve is fundamentally a strong business and with a competitive financial platform in place we see significant opportunities ahead as a best-in-class partner to the public and private sector."