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Update on Interserve refinancing efforts

22 March 2018

Interserve has announced that discussions with creditors "have continued to progress well" with agreements reached in principle on "major commercial terms".

Having reached this stage, the terms are now subject to receiving approval from all providers before they can be finalised.

The company stated that its lenders have also agreed to extend the covenant test deferral date to 30 April to allow for the necessary documentation to be processed.

Included within the latest update are cash facilities of £196.6m and bonding facilities of up to £95m which will mature in September 2021.

Interserve announced it has drawn £45m from its revolving credit facility to date and borrowed funds will be repaid from the new facilities once these are in place.

Total borrowing funds of £834m will be made available "immediately" once the refinancing deal is complete, subject to "certain step downs", up to September 2021.

Pricing on the company's new facilities, its existing debt and bonding facilities have been renegotiated, with the 2018 total expense expected to be approximately £56m, including £34m cash interest.

Increasing its bonding costs to £3.2m will have a cash impact of less than £1m, it stated.

Interserve also proposes to issue warrants to cash providers and bonding facilities to buy shares at 10p each, providing warrant holders with interest of up to 20% of post-issue share capital.

The company also stated it had "engaged extensively" with the Interserve Pension Scheme trustees over the new financing, reaching agreement over security protection subject to the finalisation of the required documentation.

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