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Llucan, you are completely wrong, Coltrane are not in control here!
They own 27% of the shares, and can use that to vote against the refinancing if they choose, but they do not have enough votes to guarantee that the board will be defeated. Assuming they defeat the board and the refinancing is blocked, then the board can elect for a pre-pack administration, where all shareholders (including Coltrane) are wiped out.
This will happen over the weekend and the company will continue operating on Monday morning as Fate has stated. Mouchel has been here before, and that is exactly what happened. The quotes below are from the RNS released by Mouchel at 18:01 after losing the vote earlier that day.
"While it is unfortunate that shareholders have chosen not to approve the terms of the restructuring, and in doing so have declined the opportunity to receive the special dividend of 1p per share, the Board is pleased that the restructuring of the Mouchel group's balance sheet can be implemented by an alternative mechanism, by which existing customer contracts and employees will be safeguarded, achieving the objective of securing the businesses' long-term future."
"The Board believes that the group's businesses are stable and that the expected sale and related transactions will provide them with a sustainable capital structure for the future."
"The Company's discussions with its lenders have been successfully concluded. Accordingly, the terms of the alternative plan have now been finalised and the Board expects that the administrators will be appointed imminently and that, following their appointment, the administrators will immediately sell the Company's assets (including the group companies beneath the Company) to a newly incorporated company. It is expected that following completion of the Alternative Plan, this company will be owned by affiliates of the Company's lenders RBS, Lloyds Banking Group and Barclays and management. As the Restructuring was not approved, shareholders will not receive the proposed special dividend and, given the level of existing debt owed by the group, the expected sale by the administrators will result in shareholders not receiving any value for their share holding."
Llucan, you are completely wrong, Coltrane are not in control here!They own 27% of the shares, and can use that to vote against the refinancing if they choose, but they do not have enough votes to guarantee that the board will be defeated. Assuming they defeat the board and the refinancing is blocked, then the board can elect for a pre-pack administration, where all shareholders (including Coltrane) are wiped out. This will happen over the weekend and the company will continue operating on Monday morning as Fate has stated.Mouchel has been here before, and that is exactly what happened. The quote below are from the RNS released by Mouchel at 18:01 after losing the vote earlier that day."While it is unfortunate that shareholders have chosen not to approve the terms of the restructuring, and in doing so have declined the opportunity to receive the special dividend of 1p per share, the Board is pleased that the restructuring of the Mouchel group's balance sheet can be implemented by an alternative mechanism, by which existing customer contracts and employees will be safeguarded, achieving the objective of securing the businesses' long-term future.The Board believes that the group's businesses are stable and that the expected sale and related transactions will provide them with a sustainable capital structure for the future.""The Company's discussions with its lenders have been successfully concluded. Accordingly, the terms of the alternative plan have now been finalised and the Board expects that the administrators will be appointed imminently and that, following their appointment, the administrators will immediately sell the Company's assets (including the group companies beneath the Company) to a newly incorporated company. It is expected that following completion of the Alternative Plan, this company will be owned by affiliates of the Company's lenders RBS, Lloyds Banking Group and Barclays and management. As the Restructuring was not approved, shareholders will not receive the proposed special dividend and, given the level of existing debt owed by the group, the expected sale by the administrators will result in shareholders not receiving any value for their shareholding."
It is all down to how Coltraine reacts in my opinion.
In the article it states:
"A pre-pack administration enables the company to sell itself or its assets before it appoints administrators who take over the running of the business to protect creditors".
The shareholdets own the company before it goes into administration. The shareholders can vote for a normal liquidation and administration if it gives the creditors and shareholders more money.
What is unusual with this pre-pack is that the shareholers may not agree to it.
The shareholders still own the company when you are stating the assets will be sold off, (notably Coltraine) he can object as all the shareholders can to the assets being sold off.
This is not a creditors winding up. There are no petitions to the court.
No debts have yet been unpaid!
The shareholders Coltraine can decide what happens to the company.
https://uk.reuters.com/article/uk-interserve-debt/interserve-set-for-pre-pack-administration-if-debt-deal-fails-source-idUKKBN1QQ0MZ
Note the sequence : Interserve companies sold off first, then administration
Easy - be assured as part of the Supply Chain you will not be affected.
This is not a liquidation like Carrillion was.
Llucan
You have described Administration not the Pre Pack Administration that has been planned.
ALL THE PARTS OF THE BUSINESS WILL BE SOLD TO THE LENDERS (FOR DEBT) AS GOING CONCERNS BEFORE THE PLC GOES INTO ADMINISTRATION.
Then the PLC Group company (that everyone has shares in) will placed into administration.
Interserve Construction, FM, RMDK etc.. are not put into administration. They continue as before but owned by a new Company set up by the Lenders.
This is what has been long planned and IT WILL NOT AFFECT THE SUPPLY CHAIN.
Fate.
If the group PLC is the holding company and it goes into administration, all of its subsidiaries also go into administration. These are assets of the holding company.
You can liquidate a subsidiary but not the holding company without the whole group being in administration.
Fate has been woefullu wrong in nearly every prediction that he has made regarding Interserve on this board. However, it would appear he's correct regarding the impact on suppliers should pre pack take place. That is if you believe the words of Debbie White.in todays Sunday Times. "White is blunt about what will happen if the debt-for-equity swap is rejected. The accounting firm EY will take over as administrator of the listed parent company. All of Interserve’s trading entities, staff and contracts will transfer to a new, unlisted company owned by the lenders that will emerge on the following Monday, and continue trading normally. “It will be business as usual on March 18 for all of our staff, clients and suppliers,” she said." That said, what is your experience of business as usual, Easy?
"If I do nothing and hold my current shares, and the vote goes through, what will my holding be worth after all this?"
Matts241,
Your shares will still be worth around £400,assuming that the the sp stays around 15p.
The issue is that there may be 20 times more shares in issue than before the Open Offer (19 new ones plus 1 old share). Hence by not taking up any new shares you would own one twentieth of the company's stock, that you previously owned; a 95% dilution.
Added to this if the vote is rejected you could lose the entire £400. If the vote succeeds, but not enough shareholders buy new shares the company could be taken private, which would make the shares very difficult to trade.
Llucan,
You could not be more wrong and unduly concerning suppliers to Interserve.
Please re-read my previous post on how the pre-pack administration has been planned.
Look carefully at the sequence of events that I have described. The sequence is the important part.
Only the group plc company will be put into administration. All the other parts of the business will be sold to the lenders as going concerns. These parts are not in administration. Their debts still get paid to suppliers and subcontractors.
Only the shareholders will be left with nothing.
You should not be posting scare stories that unduly worry the supply chain.
The pre pack administration has been very well planned not to affect the supply chain.
Well perhaps electrical monitoring may be extended from water to EfW as this will promote double digit growth. If this doesn’t work then the next best alternative is to consider growing grapes in Stourport near 7 and opening a cafe. Much safer bet than borrowing US dollars. Finally if you need office space then contact a facilities management expert. Dyor and you will grasp my thoughts on how you may invest your wealth in the future that’s if you have any left. Other than these ideas continue to invest in facilities management, that does construction. History shows these activities are cast iron and successful....
Behind all this.? Adrian Ringrose, former CEO. He lead them into this mess with energy for waste . You cant really blame DW. He went on record to say that they were in nowhere near as bad a position as Carillion ( Daily Telegraph). He now manages Syrinix having taking a chunk of money to leave IRV. As for the other BOD ( Barker et al) , where the f were they during this mess? They definitely deserve to go...
Given there is enough money at the adminstration date to pay off liabilities other than secured lenders who are carried over to new co, the only people that get shafted by this pre-pack would be the current shareholders.
This really smacks of a stitch up top me.
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!
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.
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 :(
The only reason the BOD could put Interserve into a pre-pack is that the company cannot pay its debts. If it is viable and can pay its debts from normal trading then the administrator would not agree to a pre-pack.
Coltraine will not take this well he could well object to the pre-pack assuming the company can pay its debts.
If the company does go into a pre-pack there is an order in which creditors are paid from any money that teh company was sold for:
1) Administrators fees.
2) Secured creditors, likley lots of these debts would be carried over to the new co in full.
3) Tax owing eg NI and PAYE VAT etc
4) Unsecured creditors, basically trade creditors
5) Shareholders. Always the vert last
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.
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.
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?
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?
If Coltrane plan was taken up I would through money at this firm, and sack the crooks that run it now. No thought for shareholders at all thank god there are a few firms that still do value there shareholders.
Long term holders have lost 95% of their value and are likely to vote against the current BOD just to wave two fingers to them and see them out on their derriere. The BOD have lied continuously and I certainly wouldn't chip in any more money just so we can support their fat wad pay cheque until next time.
Write IRV off - the BOD are incompetent and this last stand is just another example of their stupidity...and they have the balz (sp.) to ask for another £3 per share - you'd be mad to throw good money after bad ...extract and urine if you ask me.
Please could someone advise. I hold approx 2800 shares - worth only about £400 now :-( based on current share price. I have been informed about the OO. I’m a little confused about the dilution. If I do nothing and hold my current shares, and the vote goes through, what will my holding be worth after all this?