Interserve and lenders agree terms for debt-for-equity swap

21st Dec 2018 07:43

(Sharecast News) - Interserve has negotiated the main terms of a debt-for-equity swap with its lenders, with a portion of new shares offered to existing and new investors through a public offering.The construction and services company, which has warned that the issue of new shares will result in "material dilution" for existing shareholders, confirmed that the arrangement will allow it to target net debt below 1.5 times adjusted operating profits by the end of the 2019 financial year.Interserve, which has also agreed to defer a debt payment due in early February until the end of April, said it was mulling spinning off its RMD Kwikform unit into a new separate entity controlled by creditors.As for the main deleveraging plan, management said that the "key commercial principles" have now been "conditionally agreed" with all its lenders.Approval will be needed from Interserve shareholders, lenders, bonding providers and the pension trustee once final terms are announced in early 2019.Chief executive Debbie White said the debt-for-equity swap "will provide us with a strong balance sheet and enable us to move forward with confidence and the ability to improve our business and deliver our long term strategy".