(Reuters) – Interserve Plc said on Monday it was considering an updated proposal from its largest shareholder Coltrane Asset Management, as the loss-making British support services group tries to tackle its debt mountain.
Interserve last week offered a sweetened rescue plan to its shareholders, under which they would retain five percent of the company as part of a debt-for-equity deal with lenders to avert a collapse like that of rival outsourcing group Carillion.
But New York hedge fund Coltrane said on Monday it had written to Interserve’s board with an alternative plan.
Interserve said it had received the proposal from Coltrane and was considering it.
“A further announcement will be made in due course. In the meantime, the board remains committed to achieving a consensual deleveraging plan,” Interserve said in a statement.
Coltrane, which holds about 27.7 percent of Interserve, has proposed an issue of at least 110 million pounds of new shares pro rata to Interserve’s shareholders.
“This new issue and the conversion of 435 million pounds of debt in the company into equity at par would leave existing creditors owning 55 percent, with shareholders owning 37.5 percent, assuming a full take up,” Coltrane said in a statement.
Interserve, which maintains eight of Britain’s 10 busiest railway stations and cleans thousands of London Underground carriages, made a loss last year of 111.3 million pounds.
In February, Interserve had struck a rescue deal where its lenders would ultimately take control of the company in a debt-for-equity swap that would have largely wiped out existing shareholders.
Interserve then revised the rescue deal to doubled the stake existing shareholders will retain in the British outsourcer to five percent. Banks agreed to provide an additional debt facility of 110 million pounds, the company said last week.
Interserve’s high level of debt had come under scrutiny after rival Carillion collapsed last year under a weight of debt and pension dues, forcing the government to step in to guarantee services.
(Reporting by Justin George Varghese in Bengaluru. Editing by Jane Merriman)