(Reuters) – Shares in Interserve Plc jumped more than 20 percent on Friday after Sky News reported the troubled outsourcing firm’s lenders will improve the terms of a 500 million pound rescue deal to win over the company’s biggest shareholders.
The lenders are in talks to double the proportion of Interserve’s equity that would be owned by its existing investors, Sky News reported, citing sources close to the company.
Interserve struck a rescue deal earlier this month that will see lenders take control of the company by swapping millions of pounds worth of debt for new shares, giving the group a chance of survival.
The company did not have an immediate comment.
Racing to avert a collapse like that of peer Carillion, Interserve has said it would cut debt by more than half to about 275 million pounds after creditors wrote off loans in return for new equity worth 97.5 percent of the share capital.
Existing shareholders, who saw the company lose 90 percent of its value in 2018, will largely be wiped out under the existing deal. Under a new deal, the investors would own 5 percent of the outsourcer, Sky News said.
The firm said earlier that it was also “actively preparing” alternative plans to ensure the proposed deal can be implemented in the event that shareholders shoot it down.
Aberdeen Standard Investments, which owns about 6.9 percent of Interserve, is one of the shareholders who could support the revised debt-for-equity swap, the report said.
The company’s biggest investor, Coltrane Master Fund, L.P., had called for eight of the company’s directors to be removed, adding it supports Chief Executive Debbie White.
Interserve is one of Britain’s biggest outsourcing and construction companies, employing 75,000 globally to deliver contracts including cleaning hospitals and serving school meals.
Interserve’s high level of debt had come under intense scrutiny after peer Carillion collapsed last year under a weight of debt and pension dues, forcing the government to step in to guarantee services.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D’Silva)