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Interserve Reaches Milestone On GBP291.6 Million Financing Agreement

Wed, 21st Mar 2018 18:15

LONDON (Alliance News) - Interserve PLC said on Wednesday that it reached an agreement with lenders and other financial stakeholders on major commercial terms as well as extended the covenant test deferral date to April 30.

The stock was closed up 26% at 87.90 pence per share on Wednesday.

The UK-based support services and construction company said it will receive GBP196.6 million in cash and up to GBP95.0 million through bonding facilities by September 2021.

Interserve said it will use GBP45.0 million from "new facilities" to repay borrowings, which expire on April 30. Upon completion of the pay back, the company's total loan will be reduced to GBP834.0 million.

The group expects the total interest expense in 2018 to come in at around GBP56.0 million of which about GBP34.0 million will be cash interest. In addition, it anticipates the cost of bonding instruments at around GBP3.2 million, of which the cash impact is less than GBP1.0 million.

Interserve said it assumes to issue warrants to the providers of the new cash and bonding facilities to buy shares at 10.00 pence each.

Interserve Chief Executive Officer Debbie White said: "Today's announcement is a significant milestone for Interserve and a major step in securing a firm financial platform to underpin the group's future. We 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."