Mothercare – “refinancing, restructuring and reorganising… to ensure a sustainable future”. Is there?
Tom Winnifrith Bearcast: Why I think Malcolm Stacey is wrong on Bigdish & good riddance you mendacious old hag
I first warned about Interserve at about £1 back in October 2016, warned about it all the way down ever since and made it my sell tip for 2019. Today at an EGM, shareholders – as I had expected – voted down a debt-for-equity swap in which they would have retained 5% of the company. The shares were suspended immediately and at 2pm it was announced that the board will apply to the High Court for the company to be put into administration. In short, it is a 100% wipe-out for shareholders – and time for an Ouzo at Deputy Sheriff Towers.
I make no apology for saying sell and keep away from fully-listed Interserve (IRV) as we run up to tomorrow’s make-or-break shareholder vote. With rebel investor Coltrane holding just under 28% and planning to vote against, the risk to other shareholders is an immediate pre-pack administration which hands the whole outfit to lenders and shareholders get nothing.
Next Friday shareholders in fully-listed Interserve (IRV) will vote on the proposed financial restructuring which will see them reduced to 5% of the resulting equity, with creditors getting new shares at 15.3p in return for £435 million of debt. Interserve’s largest shareholder, Coltrane Asset Management with 27%, opposes the deal and if it is not passed a pre-pack administration beckons whereby shareholders will get nothing. The stakes are high.
Last night Coltrane Asset Management, the biggest shareholder of fully-listed Interserve (IRV) came back with a revised rescue offer in reply to the revised debt-for-equity offer already on the table as the battle between Interserve’s lenders and shareholders intensified further. Coltrane says its deal is better but Interserve says the D4E on the table is the only deal or bust. Should I change my mind that Interserve is a sell?
One has to take one’s hat off to Coltrane Asset Management, the holder of about 28% of fully-listed Interserve (IRV). Seemingly from a stunningly weak hand, concessions have been forced out of the management and lenders to offer a doubled interest of 5% to current equity holders in the event that the proposed restructuring goes through. But it seems that Coltrane still wants more, even though the company has now published its full proposals and called the general meeting.
Fully-listed Interserve (IRV) saw gyrations in its share price yesterday as news leaked out on several fronts in the battle to restructure the company’s finances. The shares started at 10.26p, fell as low as 9.5p and then rallied hard to close at 15.6p, having been up to 16.6p. So what was going on and have shareholder prospects changed from 8p or 0p?
A little RNS popped up from fully-listed Interserve (IRV) at 9.56am today telling us that Goldman Sachs has been dumping stock like there is no tomorrow. In this case of course there may indeed be no tomorrow (as discussed HERE), as Coltrane Asset Management tries to block the D4E deal and risk a pre-pack insolvency which would wipe out all shareholders. But who bought the Goldman stake?
Shares in my Christmas (sell) tip, fully-listed Interserve (IRV), slipped again yesterday after an article in the FT (see HERE) pointed to the stand-off between the company and its largest shareholder, which wants to derail the debt-for-equity swap proposed by the company’s management. The problem is that the company owes £66 million of overdue payments to the banks, which could force the company into liquidation.
We still await full details of the debt-for-equity swap at fully listed Interserve (IRV). But on what the company has told us so far, it is clear that the shares, at about 11.6p, are a stonking sell. Here is why.
Fully-listed Interserve (IRV) announced some details of its deleveraging plan – aka debt for equity – and the market has responded very positively. Certainly, on the face of it shareholders might think they’ve got off lightly. But there are a few questions which might make the market rethink its positive response.
I see that SKY News has reported that fully-listed Interserve plc (IRV) is closing in on a debt-for-equity rescue deal with its lenders. The report goes on to suggest that £300 million of debt is to be converted to equity and that a deal could be announced within days. Well that’s jolly good – so are equity-holders saved, then? Er…not so fast.
As I have pointed out before, when a company’s management tells you that it is bust it pays to believe them. Last month I recommended shorting Flybe (FLYB) at 15p on the basis that although the statement in November, putting itself up for sale, had not used the word “worthless” to describe its equity, it was clear that any bid for the debt-laden company was not going to leave anything more than a token amount for shareholders.
Yesterday we learnt what a complete disaster the rights issue for Keir Group (KIE) was: a whopping discount failed to attract more than 40% of shareholders to pony up at 409p and the underwriters took the hit, offloading at just 360p. But never mind, massively over-indebted Interserve (IRV) announced this morning that good progress is being made on its deleveraging plan, involving a debt-for-equity swap of, I reckon, about £500 million – against its current market capitalisation of just £16 million.
Another dismal year for public services provider Interserve (IRV) was capped off by a further 50% slump in the firm’s share price earlier this week. The price reaction formed a direct response to the revelation that Interserve is seeking a rescue deal which – according to Christopher Williams (The Telegraph) – represents “a disaster for shareholders”. In this week’s article, we take a look at current tip sentiment; do the consensus believe the firm now can be salvaged, or is it is doomed to fail? The answer: it depends on who you ask – tipsters, or brokers?
Whilst Tom Winnifrith enjoys an early morning glass of ouzo upon confirmation that MySquar (MYSQ) has finally departed the Casino amid allegations of fraud and someone’s fingers in the till, there is another party going on at Deputy Sheriff Towers: fully-listed Interserve (IRV) has finally confessed that its shareholders are going to get clobbered. Indeed, the shares this morning fell way below their nominal price of 10p in the scramble to get out and currently sit 47% down on the day at around 12p...
Shares in fully-listed Interserve (IRV) had a bad week last week, tumbling to a new low point of just 27.5p, which makes my sell call at around £1 look like an act of pure genius. Having suffered something of a tremor following a BBC report that there were plans to tap shareholders up to sort out its balance sheet – which looked a little unlikely given the (then) market cap of around £50 million and debts of around £600 million without a massive debt-for-equity swap – the shares recovered some temporary poise on a Statement following recent press coverage which failed to mention the issue.
Following the suggestion from the BBC that fully listed Interserve (IRV) was planning to tap up its shareholders for cash, and the non-denial which didn’t even mention it from Interserve, today the cat has partially escaped from the bag. We are told this morning that a Deleveraging plan [is] movng forward for announcement in early 2019. Given that year-end net debt is expected by the company to sit at between £625-650 million and the market capitalisation is (last seen) down to just £49 million it is clear that the BBC story is only partially true, as I suggested HERE.
The BBC has run a story suggesting that fully listed Interserve (IRV) is going to raise cash from its shareholders and quoted a former shareholder suggesting that it won’t survive. The media picked up on it and the shares crashed again. Of course, I’ve been a bear of Interserve for an age, as regular readers will know (and been proved 100% right so far)...
Particularly Nigel Somerville has been warning on support services and construction company Interserve (IRV) – most recently with £35m contract: whoopiedoo, but it is insignificant, concluding that it left him wondering whether the company is simply trying to shore up its declining share price (then about 60p) ahead of a placing. So I still say sell. Yesterday the shares were down circa 15% to below 40p and currently today they’re further materially lower towards 30p…
When I first commented last October 15th on fully listed Interserve (IRV), it was sacking its old board and in a financial mess, and the shares were around £1. I said sell – and glory be, the shares sit this morning at about 60p after an RNS telling us of a new £35 million contract. The RNS strikes me as getting any good news out it can.
It wasn’t a great week, last week, for shareholders of companies starting with Inter. Whilst Interquest (ITQ) served up an after-hours notice of an EGM with proposals to delist the company and a derisory offer at 24p on Friday (at 5.22pm!), Interserve (IRV) announced at 7am that is was the subject of an FCA investigation regarding its market disclosures between 15 July 2016 and 20 February 2017 in relation to its (now) exited Energy-from-Waste business. I’m completely with Tom Winnifrith on the former. On the latter, however, the FCA seems to be missing its target completely on this issue.
One minute everyone is celebrating the rescue deal to save fully listed Interserve (IRV) and the share rally strongly to peak at over 110p. Now all of a sudden, we are back to 82p. Perhaps it is the 25% dilution at 10p to come which has sunk in – or perhaps it has something to do with a story yesterday in the most excellent Construction News which tells of a horror story at an Energy from Waste project in Glasgow – from which Interserve was sacked in 2016. According to the report, Interserve could be on the hook for £95 million. The silence form Interserve if deafening.
Shares in fully listed Interserve (IRV) have shot up on the almost after-hours announcement last night of some scant details of a rescue refinancing. The good news is that someone is putting up the bunce (subject to credit approvals), but at what cost?
I see that today’s Telegraph is reporting that Emerald Investment Partners (and the man behind it, Alan McIntosh) in emerging as a key player in the refinancing discussion of fully-listed Interserve (IRV). We are told that Emerald has pledged to back the refinancing, which is very good news. The last thing we want to see is another Carillion-style collapse.
I haven’t commented on fully listed Interserve (IRV) for a while. This, of course, is another outsourcing company doing our blessed government’s good works for it – and, like Carillion (RIP) is struggling with its debt (albeit we are to believe to a lesser extent). It is also a company which has delivered less than complete clarity. But it is under new management. So I wonder why the shares (now down to just 64.9p to sell as at Friday’s close) have again been slipping.
I noted yesterday that shares in fully-listed Interserve (IRV) seemed to be in free fall. At time of writing they were down 15% and they dropped further at the close. There was no RNS, nor any news I could find. Following a spot of digging, the FCA spreadsheet of net short positions shows a spot of recent activity: why?
I realise that there may be a spot of nervousness in the market at the moment – especially in the wake of disasters at Carillon and Capita. Does that explain why shares in fully-listed Interserve (IRG) are off by 15% today, with no RNS announced?
I read with interest that fully listed Interserve (IRV) some good news in its RNS on Wednesday of this week. It has secured £180 million of short term funding to the end of March, and an agreement to defer covenant tests on its borrowing also until the end of March. Great news! Well, sort of. The problem – as revealed by Sky News (see HERE) later the same day - is that there were conditions which were not mentioned by the company.
Fully listed Interserve plc (IRV) has announced the departure of its support services managing director, Mr Bruce Melizan. He has stepped down from the Board and will stick around until the end of January to effect a handover. A second announcement describes the severance package….I wish I had one of those!
Shares in main market-listed Interserve (IRV) have been falling today, last seen down a thumping 8.2% - quite a drop for a £106 million company when there has been no news. One wonders why.
Yesterday revelations on Sky and a company statement made clear that all is not well at Interserve (IRV), for all the positive noises about constructive discussions with its lenders, Sky revealed that a syndicate of lenders including Royal Bank of Scotland and HSBC had called in Ernst and Young amid fears about the balance sheet. Noting also that the balance sheet is painfully thin, as per its recent interims statement, and the calamitous profit warning last month suggesting that the company had no idea of the eventual magnitude of the provision needed associated with its exit from its energy-from-waste business, as well as questions over current trading and you already have pretty good reasons to get out.
A little bit more of a look at main market listed Interserve (IRV) simply serves to underline my comment earlier that it is a sell.
Main market listed Interserve (IRV) has followed up its profit warning of 14 September with a statement today that it is in constructive and ongoing discussions with its lenders. The word constructive may sound positive, but I fancy it is anything but: the 14 September warning said that the Board continues to believe that the group will be able to operate within its banking covenants. Oh, and the CFO stepped down on 30 September 2017, as announced on 30 June – except that it looks like that was after a nudge.
Search ShareProphets |
Recent Comments |