LONDON (Alliance News) - Troubled support services firm Interserve PLC said Friday it was preparing to enter administration and its shares were suspended following investors rejecting a proposed share placing as part of its "urgent" deleveraging plan.
In late February, Interserve proposed a GBP435.2 million fully underwritten share placing and open offer. The proceeds were to be raised as part of a deleveraging plan which the firm described as "urgently" needed to provide sufficient liquidity to service its short-term obligations.
On Friday, however, 59% of its shareholders voted against the plan to issue shares. Only 41% approved.
Following the defeat of share placing, Interserve confirmed its shares had been suspended from trading on the London Stock Exchange.
In response, Interserve announced it would hold an "urgent" board meeting to "consider its options."
"In the absence of any viable alternative, it expects to implement an alternative deleveraging transaction, which is likely to involve the company making an application for administration and, if the order is granted, the immediate sale of the company's business and assets (i.e. the entire group) to a newly-incorporated company, to be owned by the existing lenders," Interserve added in a statement.
Interserve expects this new plan to be implemented "very quickly" with the administration and sale expected to complete by "this evening."
"It will provide the group with a strong financial position, allowing it to grow and develop the business, to deliver on its long-term strategy and protect the group's employees," Interserve continued.
Interserve added: "This transaction would achieve substantially the same balance sheet and liquidity outcomes for the group as the deleveraging plan."
Shares in Interserve - prior to being suspended - had been trading 34% lower at 6.30 pence each. A year ago, shares were trading 69.10p and hit a 80.45p high in April 2018.
