How to make your money go further

Interserve: tough on tracker funds

06/02/2019 · Interserve (IRV) 


Interserve workers in high vis and hard hats on a construction site
Swapping debt for new shares seems to be the only way to rescue outsourcer Interserve. But a recovery plan will leave existing investors with just 2.5% of the company.

Interserve’s (IRV) rescue plan has left its current shareholders with just 2.5% of the beleaguered company. The outsourcer, whose shares have fallen 98% from all-time highs, will now be majority owned by the banks and other creditors which backed a £75m rights issue and have agreed to swap part of the company’s debt for shares. It’s a slightly better outcome to the Carillion debacle – which collapsed into liquidation last year, leaving investors with nothing – but only just.

Stephen Rawlinson, an analyst at Applied Value, said existing shareholders, “are between a rock and a hard place”. They still get to vote on the deal – which seems to be the only option to rescue the company – but will be left with virtually nothing.

What has gone wrong at Interserve?

Reliable contracts for maintaining schools and hospitals under PFI schemes provided bumper profits for Interserve in the 1990s, meaning the company’s share price rose 697% between its IPO in…

Sign up and read the full article

Register to continue reading this article.

Get FREE access now

Already a member? Login

Have your say

Log in or register to view or add comments.

Investment news & insights

For access to the top news and insights from the investment world


Investor's Champion Premium Content

Subscribers to our Premium Content receive priority notification by email of newly published research. Premium Content costs as little as £3.20 per research note.

More on Premium Content

More on Interserve

Interserve: tough on tracker funds

06/02/2019 · Get Investing
Swapping debt for new shares seems to be the only way to rescue outsourcer Interserve. But…

Small Cap Review

07/09/2007 · Smallcap Review
A good week for kitchen manufacturers!

More Get Investing

Avoid calamity - read the results


Batten down the hatches – it’s time to get defensive

Five things we have learnt from the US earnings season

04/02/2019 · Amazon · Apple · IBM · Microsoft · Netflix