Embattled firm now set to unveil 2017 results
Interserve has agreed a near 拢300m rescue deal with its banks.
The deal will give it 拢197m in extra cash along with bonding facilities of up to 拢95m.
As part of the proposed new deal, Interserve鈥檚 bank鈥檚 have options to buy new shares, presently worth 88p, for 10p per share, which if exercised, would give them a 20% stake in the group.
The firm, which is expected to announce its 2017 results next week, said it now has cash borrowing facilities of 拢834m through to 2021.
It added that it will be paying 拢56m in interest this year of which 拢34m will be cash interest.
The firm has previously said that debt in the first half of this year is expected to rise to 拢600m.
Chief executive Debbie White (pictured), who joined the business last September, hailed the deal as a 鈥渟ignificant milestone鈥� and said it would 鈥渦nderpin the group鈥檚 future鈥�. She added: 鈥淲e are encouraged by the support from our lenders in respect of these new facilities, which will allow the new management team to execute our business plan, focused on delivering a great service for customers, driving growth and restoring value.鈥�
Cenkos analyst Kevin Cammack said the 鈥渞efinancing package is probably better than we could have hoped for鈥� but warned: 鈥淚nterserve will remain very heavily indebted (peak 拢600m in H1-19) and almost certainly too close to covenant levels to be comfortable. Radical action is still needed and if this entails business disposals then the underlying earnings presumably fall. Next week鈥檚 management plan will be critical and for now let鈥檚 just be content that Interserve is not the next Carillion.鈥�
Last October White began a company-wide review of the business called Fit for Growth. Last month the firm said it was shutting its power business as part of the restructuring.
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