Interserve latest news as boss issues administration warning for company
An image of the proposed new Castle Street footbridge
By Hull Daily Mail | Posted: 12 Mar 2019
Bosses at a company building a £12m bridge in Hull city centre say it faces going into administration if a financial rescue plan is rejected by shareholders in a vote later this week.
Outsourcing giant Interserve has been fighting to secure its future for several months.
Friday's crunch vote will see shareholders decide on whether to back a rescue package drawn up by some of the company's lenders, a group that includes hedge funds and major UK banks such as RBS and HSBC.
The move would reduce Interserve's current £631m debt by around three-quarters while giving the group 95 per cent of the company.
However, Interserve’s largest shareholder - US hedge fund Coltrane Asset Management, which holds a 27.7 per cent stake - has already said it intends to vote against the deal and others could do the same.
Work has already started on the new £12m footbridge in Castle Street (Image: HullLive)
In a weekend newspaper interview, Interserve chairman Glynn Barker said he expected the company’s lenders to call in a £66m loan which it would not be able to repay if the vote was lost.
"People shouldn’t assume that there are months or even weeks left without additional borrowing facilities. If we lose, we run out of liquidity," he said.
However, if the company did go into administration it's believed the current work on the new footbridge over Castle Street would not be effected.
A no-vote would see accountants EY appointed administrators and they will then sell the company for a nominal amount to the current lenders who will own 100 per cent of the new company.
The banks would look to sell off different parts of Interserve's business in due course but the board says it does not expect any interruption to the company's underlying contracts or any immediate job losses.
That scenario would see construction continuing on the bridge project, which will create a new crossing over Hull's busiest road for pedestrians and cyclists ahead of a start on the £400m Castle Street improvement scheme.
Highways England awarded Interserve the £18m contract to deliver the new bridge and an upgrade of the roundabout junction between Great Union Street and Victoria Dock last summer.
The latter will see new east-west lanes being constructed through the middle of the existing roundabout.
Both schemes are currently scheduled to be completed next year.