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Crisis-hit Interserve faces lender pressure


Lenders to the crisis-hit construction and support services group Interserve have drafted in advisers amid growing fears about the state of its finances.

Sky News has learnt that a consortium of high street banks, including HSBC and Royal Bank of Scotland (RBS), hired EY last week in the wake of a massive profit warning from Interserve.

The appointment of ‎a top professional services firm will raise concerns that Interserve, which has contracts include managing the Salisbury Plain military training base for the Ministry of Defence, could be facing a financial restructuring similar to that of rival Carillion.
Interserve, which saw its shares halve last month when it blamed economic uncertainty and weak Government spending for a downgraded profit forecast, has seen its chief executive and finance director resign in the last year.
It also warned that costs associated with exiting its energy-from-waste business would be much higher than the previous estimate of £160m.
The company’s other contracts include a construction project at Durham University and support for the UK armed forces in Cyprus, Gibraltar and the Falkland Islands.
It also worked on the renovation of Albert Bridge in London.

:: What’s behind Interserve’s gloomy outlook?
Sources said that Interserve’s lenders were becoming increasingly anxious about its balance sheet despite its declaration last month that it “continues to believe that the group will be able to operate within its banking covenants for the year ended 31 December 2017”.
‎The company now has a market value of little more than £150m, with some bankers suggesting it may be a candidate for a private equity-backed takeover.
Interserve’s woes are the latest in an outsourcing sector hit by a decline in government spending and growing cost pressures.
Carillion, Mitie and Serco‎ have all been forced to change their leadership in an effort to transform their fortunes.
An Interserve spokesman failed to return several calls seeking comment.

Source: Sky

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My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups. I am an author of various websites including Franchise UK https://www.franchise-uk.co.uk

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