Interserve seeks shareholder approval to up borrowing limit

Support services and construction company Interserve said on Wednesday that it is seeking to convene a general meeting to obtain shareholder approval to increase its borrowing limit as it expects significant balance sheet writedowns.

The writedowns are expected to comprise an impairment on goodwill and a number of other non-underlying items, most of which are either non-cash or were reflected in the net debt guidance in the update back in January, in which it said its anticipated net debt at year-end 2017 would be around £513m.

The company's two major shareholders, Farringdon Capital Management and Coltrane Asset Management, which have a combined stake of around 35%, plan to vote in favour of the increase to the borrowing limit at the GM.

Interserve said that as announced last month, discussions with its lenders and other financial stakeholders have continued to progress well, with agreement in principle on major commercial terms of the group's proposed refinancing now reached.

These commercial terms remain subject to credit approval from all providers before the new facilities are finalised. With the addition of the new facilities the group will have cash borrowing facilities of £834m immediately following the refinancing completion and through to September 2021, subject to certain step-downs in the new facilities over the period.

The company expects the proposed refinancing to be completed on or before 30 April, which is when the 2017 financial statements will be published.

At 0811 BST, the shares were down 3.3% to 80.74p.