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Only one post on this board during an active trading day!
Has everybody sold out, or committed suicide?
I think pretty much everyone has come around to expecting the same conclusion Kenj, so there is little in the way of discussion to be had! Have a good weekend.
Thanks Metamorphisis84, and you too.
So can I ask what that conclusion is? I am new to this site and am a supply chain to Interserve and concerned to which way this vote will go. Pre pack admin would be disastrous for my company given the exposure i have with them.
Easy1604,
No one knows how this will end up, but the general consensus is that shareholders are not going to fare well out of it. If the vote is FOR the refinancing, shareholders face up to 95% dilution, or spending almost £3 per existing share to maintain their current position. Then there is the threat of privatisation if enough shareholders do not buy their new shares in the Open Offer. The company have threatened a pre-pack administration if the vote goes AGAINST them.
I suspect that many shareholders have sold out facing such grim and uncertain options, and large holders like Coltrane and Standard Life may also be reducing their positions. I don't think that even the board know which way the vote will go.
Mouchel were in a similar position in 2012. The EGM vote went against the board, and the company entered a pre-pack admin, and within 24 hours was sold to a new company formed by the banks and directors. The company continued to operate as a going concern, and I assume that the supply train was largely kept in tact, but that is purely guesswork on my part. The shareholders were the only ones liquidated as far as I know.
Easy 1604,
I agree with Kenj, the vote could go either way and the Pre Pack Administration is now a real possibility unfortunately.
Communication from the Company to the Supply Chain and Clients has been poor imo. They have not clearly explained what the Pre Pack Administration would mean for them. Hence your question.
If Pre Pack Admin happens then firstly as a Shareholder you lose everything. Your shares are worthless.
How it will work is this....
On the Friday if the vote is lost. The Interserve Group company will sell off Construction, FM, RMDK and all other parts of the Business to the Lenders (for the price of the debt). The Lenders may call the new Company (which owns all the old parts of Interserve) as InterserveB or whatever, they decide change the name to.
The group company PLC will then be put into Administration and no longer exist.
The Board Directors of Interserve will (as part of the pre agreed deal) become the BoD of the new "InterserveB".
On Monday morning all Interserve's current work will continue as usual but carried out by the new company. Subcontractors and Suppliers will get paid as before and Clients will receive the service they are paying for.
So as part of the supply chain you will be fine.
But the big losers will be .....
Firstly the existing shareholders who receive nothing - just an explanation from the new Company saying it was necessary.
Interserve brand reputation will be massively damaged and at some point the Company name will have to be changed.
Employees may be unsettled and churn rate could increase.
There will be costs associated with the Administration and setting up the new company that Interserve could well do without.
The new company may well be de-listed as will be a private company owned solely by the Lenders and some of the BoD maybe as a payoff for promoting the Lenders deal.
So a final note to existing shareholders consider the current risks. This may not end well, so consider this time next week your shares could be worthless and make your own decision on what to do.
No one knows which way the vote will go. Not even the Bod.
"Interserve brand reputation will be massively damaged and at some point the Company name will have to be changed."
When Mouchel was taken over by the banks in 2012, the new company replacing it was named MRBL. But who the hell has ever heard of MRBL? The company reverted to Mouchel shortly before or when it was acquired by KIER. Clearly they believed that Mouchel was more likely to win contracts than a company (MRBL) that was largely unheard of. KIER later sold Mouchel to WSP, who decided that the Mouchel name no longer carried any qudos, so it is now just part of WSP.
Thank you all for your replies, much appreciated. Just so I'm understanding this correctly, so even if pre pack admin were to occur, the debt owed to me from Interserve as of today, would be transferred to newco and I'd still be paid that debt?
Easy, its a good question, I would agree in the main with the replies you've had, however they focus on the fate of shareholders as opposed to suppliers. My experience of administration and certainly liquidation, is that creditors are at the front of the queue and everyone else including suppliers, at the back. Certainly when Carillion went (liquidation) a lot of suppliers did not get paid, and a number have since gone under, some citing Carillion non payment as being a factor. However, would pre pack be the same as straight up administration? Mouchel has been mentioned here a few times as having gone into pre pack. Can anyone inform as to what happened to suppliers in that instance?
Easy 1604
In all situations you will be OK as a Supplier. The business will continue and you will be okay.
The shareholders on the other hand will be left with zero.
Only the secured debts are carried over. Eg the banks. All the other debt, supplier monies owing and unsecured loans including tax is not paid.
The company then carries on trading having shafted everybody.
The only people that benefit are the employees and the BOD. And the secured lenders if they ever get their money back. All employees carry on under the same contract.
It would be illegal for the company to pay a supplier any money owing since they have to treat all creditors in the same manner. Cannot show preference.
I would say Glyn Barker and Debbie White are the two directors who have misled shareholder s the most.
Often in a pre-pack it is the shareholders that buy the company. The administrator still has to market the company and get the best offer. But in a very short space of time.
If Mitie for example offered more than the secured creditors or shareholders the administrator would have to chose the offer with the best prospects and highest price.
Thank you, that it what I presumed would be the case. So any debt outstanding as of today, unless secured by floating or fixed charge etc is going to be bad debt. I, like many other suppliers to Interserve will be hoping that the deal does get approved otherwise alot of suppliers will be hit hard with bad debt from the old company :(
Correct.
If it did go to a pre-pack some supliers will not supply the new co since they have not been paid. But the new co will just go to another supplier. The new co is not allowed to pay off the debts of old co.
If you supply something that is crucial to the company like a tool which the company cannot function without or a supply of material that the new co cannot buy else where. It puts you in a strong position.
What happens is that the supplier doubles the price for example to get back the money they are owed from the old co. By charging the new co more.
If you are owed money by Interserve i would push to get paid this week. As a supplier who is owed money you can cause a big stir at the administrators meeting.
There must be a debt looming or has loomed that Interserve cannot pay otherwise a pre-pack would not be an available option. All may not be lost for suppliers since there may be enough cash in the bank and money coming in from debtors to pay at the date of the administration to pay off the creditors. In which case only the shareholders lose out!
Also LLucan, you have to factor in "trust". If a company does not pay a supplier then another supplier is far less likely to supply them (because they will assume there is a good chance they won't be paid, just the same as the previous supplier wasn't paid).
Love_You.
"Do not get me wrong"
Interserve 100% will have a future. If it is a liquidation, administration then the suppliers and everybody will lose. But there are still very profitable parts of the business that would be sold off by a liquidator very quickly.
If it is a pre-pack then it seems that only the shareholders lose and all the suppliers get paid and it carries on as before as a private company.
A pre-pack as we know is very bad news for existing shareholders.
Coltrane I suspect is holding out for a better deal than 5% which is being proposed. He has already manged to get it up from 2.5%.
He has said that he will just lose his stake rather than accept 5%
Hence it all comes to Friday and who blinks first!
As for sharholders Do you sell now or take the gamble?
"Do you feel lucky punk"
If it id s prepack it seeems that the suppliers will noy