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UK to continue to grant contracts to embattled Interserve - FT

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By Reuters
UK to continue to grant contracts to embattled Interserve - FT
FILE PHOTO: Interserve offices are seen in Twyford, Britain January 17, 2018. REUTERS/Peter Nicholls/File Photo   -   Copyright  Peter Nicholls(Reuters)

(Reuters) – Britain’s government will continue granting contracts to Interserve Plc <IRV.L> as the debt-laden British outsourcing company battles to avoid a Carillion-style collapse, the Financial Times reported on Tuesday.

Britain does not see Interserve as another Carillion <CLLN.L>, which collapsed in a mass of debt and pension dues in January, the FT reported, citing government sources.

Government tenders expected to be released early next year include a contract to provide housing for asylum seekers and another running a back-to-work programme for the unemployed, the newspaper said.

The British government and Interserve had no immediate comment when contacted by Reuters.

Shares in Interserve lost more than half their value on Monday after the company announced a rescue plan that envisaged converting much of its debt into new shares, potentially handing control of the company to its creditors.

The Reading-based outsourcer, which employs 75,000 worldwide and has thousands of British government contracts to clean hospitals and serve school meals, said on Sunday it would seek to cut its debt to 1.5 times core earnings in talks with lenders that it hopes to complete early next year.

Interserve also announced on Monday it had been awarded a 25 million pound ($32 million) contract from Cwm Taf University Health Board as part of a 36 million pound redevelopment of Prince Charles Hospital in Merthyr in Wales.

(Reporting by Samantha Machado in Bengaluru; Editing by Edmund Blair)