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Rescue deal announcement expected for Interserve

05 February 2019

Progress on finding a solution to the financial difficulties of Interserve is expected to be announced in the near future, according to Sky News.

It is possible that the deal will be announced this week, it said, and will involve the exchange of "millions of pounds of debt" for company shares.

The company's ongoing struggles have been widely covered by the national media and given further emphasis since the collapse of Carillion just over a year ago.

However, Sky News reported yesterday that the company has agreed details about its restructuring with lenders.

The news will "provide enormous relief" to the government, due to the high number of public sector contracts managed by the business and the fact it employs 45,000 people in the UK.

Interserve chief executive Debbie White implemented the Fit for Growth programme last year, leading to reports on its progress in recent months as the company attempted to reassure the market.

As part of the programme, the company confirmed it has jettisoned the loss-making waste-to-energy business Dunbar in the most recent development.

If the rescue deal is confirmed, it is expected that this will see £300m of the Interserve debt exchanged for new shares.

However, this figure represents just 50% of the company's borrowings, leading to further conjecture on how Interserve will manage this in the future.

Sky News also reported that previous discussions on handing the company's building materials division to lenders "was now unlikely to be pursued".

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