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27 February 2019 | Herpreet Kaur Grewal
Interserve's board has released details of its proposed deleveraging plan, which has been agreed with all of the company's lenders, bonding providers and the Pension Trustee.
The key elements of the deleveraging plan include placing an open offer of new ordinary shares at 15.3 pence per new ordinary share, to raise about £435.2 million.
It also includes 19 new ordinary shares for every one existing ordinary share.
The new ordinary shares will be provisionally placed with the senior cash facility lenders, subject to clawback in full to satisfy valid applications by qualifying shareholders under the open offer.
The fully underwritten placing and open offer also includes:
Any cash proceeds from the placing and open offer will be used to repay the senior cash facilities.
Any new ordinary shares issued to senior cash facility lenders pursuant to their underwriting obligations will be subscribed for in consideration for the release of debt under the senior cash facilities.
For every nine pounds' worth of new ordinary shares that the senior cash facility lenders or their designated allottees subscribe for (calculated at the issue price), the amount of debt under the senior cash facilities that will be released will be 10 pounds, such that the senior cash facility lenders release a higher par value of debt than will be paid by qualifying shareholders who subscribe for new ordinary shares at the issue price pursuant to the open offer. For every nine pounds' worth of new ordinary shares the qualifying shareholders subscribe for (calculated at the issue price), which proceeds will be used to repay the debt payable by the company, one additional pound of debt payable by the company will be released.
The participations under the senior cash facilities that will be exchanged for new ordinary shares or prepaid from the proceeds of the placing and open offer will, in aggregate, be equal to approximately £485 million.
The new ordinary shares issued through the placing and open offer will account for 95 per cent of the ordinary share capital of Interserve as enlarged by the placing and open offer (assuming that, other than the new ordinary shares, no further ordinary shares are issued by the company between the release of this announcement and admission).
The placing and open offer and the implementation of the deleveraging plan are conditional on, among other things, the approval by Interserve's shareholders at a general meeting that the company has also announced, which will take place at The Broadgate Suite, etc Venues, 155 Bishopsgate, Liverpool Street, London EC2M 8YD, on 15 March 2019 at 11am.
The company has also separately released an announcement containing its preliminary full-year results for the 12 months ended 31 December 2018 (see story, top right).
The board considers the deleveraging plan to be in the best interests of the company and its shareholders as a whole.
Debbie White, CEO of Interserve, said: "The agreement of deleveraging plan terms with our lenders, bonding providers and Pension Trustee represents a significant milestone for Interserve. Implementation of the deleveraging plan is in the best interest of all our stakeholders. The plan provides new liquidity and creates a strong balance sheet, which, alongside our Fit-for-Growth programme, will provide us with a competitive financial structure to continue to improve the business and deliver on our long-term strategy."
A combined prospectus and circular setting out full details of the placing and open offer and the deleveraging plan is expected to be published on the company's website and posted to shareholders.