FT - Interserve (#IRV) bosses picked up £2m ahead of collapse
- 2019-04-14 06:18:25
UK 06:59 Monday, 21 September 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
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.
