(Reuters) - Troubled British outsourcer Interserve has been in talks with lenders and its top investor Coltrane Asset Management, seeking to win Coltrane’s support for a restructuring plan ahead of a deciding shareholder vote on Friday.
Interserve confirmed the talks on Monday, after Sky News reported bit.ly/2HdxKrI lenders were weighing whether to offer current shareholders - including Coltrane - a bigger stake in the support services company following a debt-for-equity swap.
Interserve is battling to avoid a collapse like rival Carillion, after struggling to service its debts due to project delays, a weak construction market and a disastrous push into the energy-from-waste market.
The company, which employs 68,000 people globally to provide cleaning and building services, struck a deal with creditors in February under which existing shareholders would retain 5 percent of the group, while creditors take control.
However Coltrane, which holds about 27.7 percent of Interserve shares, objected to the plan.
Sky News, citing sources close to the company, said lenders were weighing whether to offer existing investors 7.5 percent of the restructured company’s shares.
“The Interserve board notes today’s Sky News article and confirms that it has been in discussions with Coltrane and its lenders which have sought to establish the basis on which Coltrane would support the company’s restructuring proposal,” the company said in a statement.
“Although the board is seeking to improve the position of all shareholders, there is no certainty that it will be able to do so in the very limited time available,” it added.
Banks for Interserve have lined up a so-called pre-pack administration that will wipe out existing shareholders but enable the troubled outsourcer to keep operating, a person familiar with the situation said on Saturday.
The plan would come into force if investors reject Interserve’s debt-for-equity swap at the vote on Friday. Interserve needs the backing of at least 50 percent in the vote for the restructuring to proceed and for the company to avoid administration.
Reporting by Justin George Varghese in Bengaluru; Editing by Susan Fenton and Mark Potter