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Improved outlook for Interserve following £140m investment

06 March 2018

News of a new deal for Interserve saw its share price increase yesterday, after it was announced that £140m of its debt had been purchased.

This came from Emerald Investment Partners, according to the Evening Standard, and is seen as a positive move by investors and the financial sector.

Interserve has previously stated that its debt levels will peak later this year and is aiming to complete its refinancing arrangements by the end of this month.

The purchase of its £140m of its debt is seen as a major step in achieving the refinancing deadline and the news was attributed to a rise of just over 4p in its share price to 59.6p.

It has also announced that it will be reducing its workforce by up to 1,500.

However, the Evening Standard also quoted Interactive Investment's Richard Hunter, who said that "investor concern remain" with no details of the refinancing plan announced.

He further referred to the company's 77% drop in share prices over the last year.

Perhaps more worrying was the news that "a string of hedge funds" have bet on the company's failure, according to the Evening Standard report.

It was previously reported that a number of financial organisations had also bet on the failure of Carillion and received large payouts when the business closed in January.

Although this is an established practice within the financial sector, the ethics of betting on companies survival has been questioned by the PFM Editorial Advisory Board.

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