6 March 2019 | Herpreet Kaur Grewal
The board of troubled support services provider Interserve has rejected the Coltrane proposal.
The proposal from Coltrane Asset Management LP was received on 4 March and requires that the board should immediately halt the implementation of the deleveraging plan that was launched on 27 February and that is subject to shareholder approval on 15 March.
Coltrane has made the key terms of the proposal public.
But in a statement, the board says: "In light of the company's short-term liquidity requirements and given that Interserve's deleveraging plan is currently the only fully funded proposal which has the agreement of lenders, bonding providers and Pension Trustee, the board is unable to consent to this request without risking the future of Interserve together with its employees, pensioners, customers and suppliers".
It adds: "The board also notes that the Coltrane proposal is non-binding and unfunded and remains subject to due diligence. There is therefore no certainty that Coltrane's proposal could be successfully implemented.
"The board will be providing more detailed feedback to Coltrane on its proposal and confirms that the board remains open to considering any proposal which provides liquidity and a deleveraging solution that is capable of implementation in the time frame available.
"However, the board continues to recommend that shareholders vote in favour of the deleveraging plan, which is currently the only plan that is capable of implementation in order to provide sufficient liquidity, cash and bonding facilities to allow the group to service short-term obligations and secure a stable platform for the business."
Glyn Barker, chairman of Interserve, said: "This is a critical time for Interserve. The proposed deleveraging plan, recommended by the board, is the result of a long period of intensive negotiation to align stakeholders behind a plan to strengthen the balance sheet and secure a strong future for the business. It is the only plan today that provides a certain future for Interserve, preserving some value for shareholders while securing jobs, pensions, and continuity of services. In the absence of any other plan that is capable of implementation, further uncertainty continues to risk an outcome in which there is no return to shareholders, including Coltrane, and considerable disruption to the business.
"The board considers the deleveraging plan to be in the best interests of Interserve and all its stakeholders, including shareholders, as a whole. Accordingly, the board continues to unanimously recommend that shareholders support the deleveraging plan and vote in favour on 15 March."