THE collapse into administration of one of the UK’s largest companies was being played down by the Westminster Government last night, despite the fact that Interserve is a major provider of public services.
The announcement that construction and services conglomerate Interserve would be going into administration followed a vote by major shareholders not to accept a rescue plan that would have involved their shareholding being vastly diluted.
Instead the company entered into what is known as a “pre-pack administration” in which its lenders took control of the business to maintain it as a going concern.
Interserve employs 45,000 people in the UK and 68,000 globally. Some two-thirds of its £2.9 billion turnover comes from UK Government contracts, and in Scotland it has numerous contracts in projects, including the National Gallery extension in
After the company issued a brief statement yesterday afternoon confirming the pre-pack administration, a Cabinet Office spokesperson said: “This announcement will not affect jobs or the provision of public services delivered by Interserve. We are in close contact with the company and we are confident a positive way forward will be found.”
The company statement read: “Interserve PLC (in administration) has announced the successful completion of the sale of the group. This alternative deleveraging transaction will restore the Group’s balance sheet and provide additional liquidity.
“The administrators have immediately sold Interserve’s business and assets to a new company, to be controlled by Interserve’s lenders. All companies in the group other than the parent company will remain solvent, providing continuity of service for customers and suppliers.
“The alternative transaction involves the equitisation of approximately £485 million of existing debt and the injection of £110m of new money into the group. Completion of the transaction is anticipated to occur on or before Monday 18 March.
“The group believes this is the best remaining option to preserve value, protect the jobs of employees and ensure the group can carry on as normal with minimal disruption.”
News of the collapse comes just a year after the demise of Carillion, the UK’s second-largest construction company, which employed 20,000 people and was also reliant on government contracts.
In the modern way of doing things, Interserve took to social media to keep its staff informed. They tweeted: “If you’re an Interserve employee, we want to reassure you that it’s business as usual. Turn up for work as normal, you’ll be paid as usual. If you have got any questions, please call our employee hotline 0333 207 4180.”
The collapse provoked anger on the part of those who warned the UK Government after the Carillion collapse.
Kevin Brandstatter, the GMB union’s national officer, said: “Ministers have learnt absolutely nothing from the Carillion fiasco and are hell-bent on outsourcing public sector contracts.
“Shambolic mismanagement is putting jobs put on the line and services in jeopardy. Our public services can’t go on like this.”
The implications for the company’s supply chain worried the National Federation of Builders (NFB).
Richard Beresford, chief executive of the NFB, said: “Interserve highlights why reforming procurement is so vital. It also demonstrates the importance of using companies that win work on reputation and those that are ingrained into their local supply chains.
He added: “As with Carillion’s collapse, the NFB will be doing all it can to support members who are part of Interserve’s supply chain.”
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