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Interserve rescue deal confirmed

06 February 2019

New shares will be issued by Interserve in exchange for debt, following the confirmation of a deal agreed with the company's creditors.

Share of £480m in value will be exchanged with creditors for debt, according to the BBC, which stated this will leave "existing shareholders with virtually nothing".

The company will retain control of RMD Kwikform, its most profitable division, although it will see £350m of debt added to its balance sheet.

Shares in Interserve have fallen to around 13p from a value of 100p in just over a year.

Its latest move is the second time in just under a year that the company has refinanced its debt, following the first initiative in March 2018.

Coltrane Master Fund, which has a stake of more than 5% in the business, has issued a separate statement confirming its ongoing support for chief executive Debbie White.

She launched the company's Fit for Growth programme last year as a means to guide the business to more profitable trading.

The Coltrane Master Fund has supported her in this, but has now called for the removal of eight Interserve directors, while recommending two people to join the board.

Since the collapse of Carillion just over a year ago, Interserve has become the largest provider of public sector service contracts and has been the subject of considerable publicity due to its financial difficulties.

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