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But not sure how likely a deal like this will be approved to go through. The article mentioned that it would need more involvement and assurances from the government to get this through. But as we saw with Carillion at the time, they were reluctant to intervene more than necessary as they didn’t want to be seen bailing out a private company. However on this occasion if they do it goes totally against the word, and gives the opposition some leverage at election time. The other option on the table IRV is considering is asking the lenders to take a lesser stake. Now this would make sense and keep everyone happy.
But what assets do IRV have? We know most of their balance sheet is made up of goodwill.
It seems like a logical move from the lenders point of view. Again, if you look back to last March, some saw this coming. Metamorphosis84 20th March 18 So if the worst were to happen and Interserve were to go into administration liquidation, who would have the best claim to the assets, the owners of the debt or the owners of the shares?
So according to the telegraph IRV BOD are considering a pre pack deal to get the transaction through. Great times ahead bonuses well deserved.
You might be right meta, but they will call it a day and get what? We all know IRV has a lot of goodwill with no assets, so what exactly can they sell to get their money.
I think if the lenders and don't get their way, then they very well might decide to call it a day
It’s not over just yet, let’s see what Coltrane have up their sleeve. I’m sure the lenders must be reconsidering their deal already with their advisors, and I have no doubt other big players in this share have already had discussions with Coltrane already. I would be surprised if the BOD get this through without shareholder backing. If what Feilb says is correct about the earnings being 182m this year, then they are only indebted 4.5 their earnings, and is enough to service debt. Fully support whatever Coltrane propose as it can’t be worded than this.
The buying of the debt by Emerald was a bad thing for IRV, no doubt. A number of people here said so at the time but were shouted down. As usual. For instance my own scepticism: Metamorphosis84 20th march 18 If Emerald have such confidence in Interserve, why have they publicised the purchase of debt, not shares? Was met with responses, such as this: Billtucker89 21st March 18 Where are All the derampers that were saying shareholders will be wiped? It's funny how they ate no where to be seen, when it's clear they have been bullshitting but claim they are experts and have built themself a fortune. Met84 et al close your shorts at the earliest oppurtunity... So yeah, Emerald buying the debt was a huge red flag, and voting in favour of the onerous refinancing was a mistake. Again, a number of people here said it at the time. Unfortunately for those who went long or stayed long at the time including Coltrane made the wrong call. They should have known this would happen.
Meta- the lenders should take the pain as they are being greedy. It is their greed that bought IRV in this situation with a crippling interest rate. Secondly they knew full well IRV will struggle with the rate and it would come to this. Thirdly the govt stuck their nose in and made sure IRV kept RMD, which would have been a favourable deal for all parties. That would have strengthened the balance sheet by 350m, but it looks like they might get it after all this anyway down the road. The BOD will get their investment back as they will have negotiated the equivalent equity in the new shares so they haven’t lost either. Oh and btw they will get 125% bonus this year from the New shareholders for doubling their money overnight. How has this been for investors???
I would like to see viridor sucked in to any deleveraging deal aswell.
Viridor..........why?
They still suggest Interserve still owe them £69m and this is the next problem down the road - as soon as Interserve get a deal done they will turn the thumb screws again .
How many contractors close part of their Business (or all) then restart the next day.......
Interserve have tried to be all things to all people.......punished really badly for the EfW disaster....but it must come to a point when they say enough is enough!
Get viridor and the Lenders in the same room and sort a reasonable deal or call it a day!
Why should the lenders take any pain?
They supported the initial refinancing but the interest levels they applied were more than opportunistic....£50m per annum (or was it £80m) was hardly a good deal for Interserve.....
The government bailed out the banks when they were in trouble. No such luck for Interserve.
Most reasonable people would suggest the lenders should walk away with their initial investment plus circa 2% interest since the money was lent.
But no, the lenders want a big profit plus to keep Interserve under the cosh, so they have a chance of getting RMD aswell.
It is a bit like Brexit, I would go to the last second and walk away with no deal if that's what it took.
Interserves employees will get new jobs after a couple of months of uncertainty - a lot will get the same jobs.
Maybe the lenders should be taught a lesson!
Why should lenders take any pain whatsoever? It is Interserve that keep defaulting. And its Interserve's shareholders who voted for the refinancing and for the re-election of officers and for the remuneration of officers.
PigleaNdpoo- the point about the CFO going to BAE systems as a CFO is wrong. Tim Haywood bought his own business ( google Aston Vineyard) and retired as a CFO(for now).
The chap who went to BAE systems was actually the FD of IRV’s support services business as opposed to the group CFO.
Feilb- I have been saying this all along, but those who apparently “know better” keep saying the deal is fair and was always on the cards. As you have demonstrated the deal in question gets them all of their money back, and the remaining “debt” is all profit which will double their money. Those who bought the debt at half price have more than tripled their money, and in the meantime they have a healthy of which they will bleed the profits of many years to come.
Now we can see why Coltrane are sticking up for shareholders, as all the speculation to date was clearly saying lenders would take some of the pain but clearly not. Let’s not forget the govt own 62% of RBS so they too will profit from this deal hence they pushed for this. I know what my vote will be if I’m given the chance.
The lenders appear to be the big winners.
6bn shares at 8p = 480m but SP av. is 12p, so in reality getting £720m! The more I look at it the deal could have been more fair to the shareholders. Did the BoD get the best deal possible?
Also the deal gives lenders a big chance to get hold of RMD in the future.
Some of the lenders paid 50p for £1 of the debt. They are laughing now.
With an EBITDA of £182m to be announced, I can understand why Coltrane are upset.
The lenders were tied in to agreeing a reasonable deal and taking some pain. It doesn't appear they have taken any pain at all.....just profit.
Can anyone explain, never mind defend the points Brutinasuit makes. How is it that the people who destroy businesses and ruin shareholders be so massively rewarded for failure and walk into equally responsible positions. And just what sort of a sense of entitlement makes them think they can pocket huge bonuses while their staff have their pay frozen.
£5.4M paid out in Bonuses in 2017 whilst the 2.5% staff pay rise (That would have cost £4.3M) was frozen due to "lack of funds". Bless them. Yes they got bonuses. The CFO after signing off the EFW deals and taking the share price from £7 to £2 got a six figure payoff. And straight into another job as the CFO of BAE systems. How actually does that work ? For all you guys share chat the issue is here that the same incompetent directors get the same level jobs no matter what they have done. Interserve is an example. Best one yet is Andrew Bottomley. He destroyed HBOS and left that with a £12Bn 'hole'. Went to Lloyds TSB headed up Bankassurance that died on it's ar$e with another multi Billion liability and is now of the board of directors at Skipton B/S. Why would you hire this guy ? I wouldn't let him look after my dog.
What happened with the Interserve senior managers at KMI who were moved to EFW projects - bonuses?
It's comical reading the speculation on Interserve and the now mostly gone directors who have basically fleeced the company for years getting out what they could knowing full well it was a dying ember. I worked in payroll for years at Interserve and can tell you the bonuses paid out were simply disgusting. They knew for years the company was on the edge, it was easy to with-hold information to drip feed it out whilst maximising the opportunity to justify cashing n on maturing share options to keep it alive as long as possible. The board in this company were only in it for themselves. I don't see why any company would be any different so all the investment / value speculation in the world can't get you past a Carillion / Interserve scenario. Good luck with all your other investments and I hope you make some cash but don't rely on company statements. It's also funny looking up where these guys are now, Ringrose, Haywood et all. Yep all senior directors, Ringrose Chairman no less again in other companies when they should be in prison destroying shareholder value with nothing more than lies.
460k shares traded today. And a bunch of those will be O converting into AT, so call it 300k = £36k total volume. Peanuts. Day-traders won't be interested, Insufficient liquidity.
Pigleandtoe- you know that won’t hapen, they will get a nice package that pays their salary for the next year whilst shareholders and employees take the pain. We have already seen this with Ringrose and Haywood, as well as Howson at Carillion.
Their RNS have been either non existant or full of lies. Only 12 months ago they said they were restoring shareholder value, which clearly they have except its for the new incoming shareholders rather than current ones. Still have no idea how DW has Coltrane’s support as surely she had been spearheading this deal?
there is a good bit of movement at market open and I think the volatility is useable to day traders.
nothing to do with the company itself.
just the volatility
gl.
Strikes me they have been concentrating far too much on overly convoluted financial instruments along with deliberately ambiguous, contradictory and just plain impenetrable announcements to the detriment of the nuts and bolts of getting the business back on track. Now they find themselves unable to explain where all the money is going.
In addition their communication with shareholders and staff has been truly appalling both in terms of quantity and quality.
A big change is required and none of the outgoing should receive a penny of reward for their obvious failure.
Meta’s not that bad Feilb lol.
Meta yes but they only took 4m shares so far so along way to hit 20%. Though if you look at an RNS in January, there is a block listing for 14m shares for warrants which have not been put on the market. I’m guessing no equity can be issued until all this is sorted, so they are probably kicking themselves in the foot.
Good night and good luck all.
"In addition, the Company will be issuing warrants to the providers of the new cash and bonding facilities with the right to subscribe for new shares at 10 pence per share (the nominal price of each share). If exercised this would provide the warrant holders with an interest of up to 20% of the post-issue share capital." Just a thought, re the above was detailed in the refinancing document in April 2018. So did the lenders take up the warrants? And if so does that mean that as well as owning the debt, they also own 20% of the voting rights?